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Healthcare Services M&A: EBITDA Multiple Trends

Valuation multiples in the healthcare services industry are increasing, just like the price of about everything. Multiple expansion hasn't been uniform across subsectors, however. To illustrate this point, we developed size-adjusted EBITDA multiples based on healthcare services deals with publicly-disclosed financial information in the Scope Research Healthcare M&A Valuation Database for three broad industry subsectors: Home -based services, specialty outpatient services, and professional services. While there is significant variation from deal to deal within each subsector, the broad trend is fairly clear.

Home-Based Services

This category consists of home health, hospice, private duty, home medical equipment, and infusion therapy, among others. The smaller end of the market has remained relatively consistent across the three four-year buckets included in the analysis period, while larger platforms in the subsector have experienced significant multiple expansion, according to the sample.

Specialty Outpatient Services

This category consists of ambulatory surgery centers, diagnostic imaging, dialysis, and cancer centers, among others. Multiples have remained remarkably consistent across all sizes during the analysis period. This phenomenon is especially clear in the dialysis market, where the public companies and large private deals have remained at 2x revenue and 9x EBITDA for over a decade. Diagnostic imaging facilities, on the other hand, has experienced some notable multiple expansion, especially among larger platforms over the past few years, but not enough to move the needle for the broader subsector.

Professional Services

This category consists of physician groups, physical therapy, dentistry, and veterinary services, among others. Multiples have increased steadily across all sizes during the analysis period, although the most notable expansion has occurred among the larger platforms.

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