Three kinds of deals
Selling the whole center. The buyer is often a group or a hospital system that wants the facility and the physicians who operate there. Most of these deals include terms for the physicians who stay.
Selling your share. An owner who is retiring or moving on sells an ownership interest, usually to the other owners or to an incoming physician. The operating agreement often sets who can buy, at what price and on what terms.
Buying out a partner.The remaining owners buy the departing partner's share. The hard parts are agreeing on a fair value and making sure the center can still fill its schedule without that partner's cases.
What changes hands
- The ownership interest or the assets of the operating company.
- The facility license and any certifications, which usually need a change of ownership filing rather than a simple transfer.
- Payer contracts, including Medicare, which have their own notice and approval steps.
- Equipment, supply contracts, staff and the systems that run the schedule and billing.
- The lease or the building, which is often owned by a separate company controlled by some or all of the physicians.
Surgical center deals involve healthcare regulation that affects who can own an interest, how the price can be set and how physicians are paid. Every deal needs a healthcare attorney and an accountant who know surgical centers. We bring the buyer, the valuation and the real estate together; they make sure the structure is right.
How value is measured
Surgical centers with strong utilization typically trade on a multiple of EBITDA, and the valuation page gives the range we see. Within it, buyers look at:
- Case volume by physician and specialty, and how much depends on one or two surgeons.
- Payer mix and reimbursement rates, and how much comes from out of network cases.
- Operating room use: how full the schedule is and whether there is room to grow.
- Whether the physicians have committed to keep operating there after the sale.
- The condition of the facility and equipment, and the capital it will need soon.
Why the real estate matters
A surgical center is not a normal tenant. It is built out to meet licensing and safety standards, which is expensive and slow to replicate. That makes the lease or building central to the deal. A buyer and its lender need to know the center can stay in place for years, on terms they can plan around.
When physicians own the building through a separate company, the sale of the center and the future of the building have to be worked out together. Sometimes the building is sold with the center, sometimes it stays with the physicians under a new long lease. Because we hold both a business brokerage and a real estate license, we can handle both sides in one process. See business broker vs real estate agent for why that matters, and real estate for the property work we do.
Timing
Surgical center deals usually take longer than a typical small business sale because of the licensing, payer and physician steps. Starting the conversation early, well before a partner wants to leave, gives everyone more options.
Preparing for a partner buyout
Most buyouts go smoother when the partners agree on the method before anyone announces they are leaving. Read the operating agreement together: it may already set a valuation formula, payment terms or a right of first refusal. Then get the numbers recast so everyone is working from the same earnings. Finally, plan the cases. If the departing partner does a large share of the volume, the remaining owners need a plan to replace it, and that plan affects what they can afford to pay.