The Benefits of Merging Rather Than Selling
Physicians turn to companies that buy plastic surgery offices for different reasons.
While some are nearing retirement and are looking to create a seamless transition, others want to grow their practice or be liberated from administrative burdens.
Regardless of where you are in this spectrum, merging your multi-location plastic surgery practice with a private equity-backed medical support organization (MSO) offers more benefits than selling it to a larger medical group or a hospital.
Why Is Merging Better Than Selling?
Strong Planned Exit Strategy
Despite recent market disruptions, PE-backed MSOs are aggressively looking to get more large plastic surgery practices under contract. Why sell to another medical group at 60% to 80% of your collections when a PE-backed MSO is willing to pay around seven to nine times your net cash flow (EBITDA)?
Transitioning into an MSO gives you the opportunity to put a solid exit plan in place. You won’t have to worry about selling your large plastic surgery practice when you’re ready to retire. With the help of an experienced intermediary, the potential for a lucrative exit is exceptionally high.
The intermediary can develop a smart deal structure that takes the form of 80% cash payout at closing while you retain at least a 20% equity position alongside the MSO. In other words, you can expect to get paid a great deal of money as soon as your practice transitions into an MSO and later when you cash in your stock upon exit. What’s more, the 20% equity in the larger entity continues to grow as your practice and the MSO grow.
A planned exit strategy allows you to continue to work as a partner and a shareholder for a minimum of three to five years while earning a high salary plus bonuses. The longer you stay, the more financially beneficial it is for you. Best of all, you’ll spend 100% of your time doing what you love the most – providing top-quality care to your patients.
Opportunity for Accelerated Practice Growth
Perhaps you’re an entrepreneurial physician who has managed to build and run a large and successful plastic surgery office, and you’re still driven to grow and advance your practice. Partnering with the right PE-backed MSO allows you to expand upon the legacy you’ve established over the years while having access to capital that has better terms and conditions than what most plastic surgery practice owners would get on their own. Besides having administrative support on centralized services, you’ll have the advantage of working with the experts in executing innovation opportunities in a highly collaborative way.
Since the MSO is larger than your practice, they obtain economies of scale. These entities can get the lowest pricing on everything, including state-of-the-art technology, medical supplies, billing services, healthcare insurance, and more.
Looking for Companies That Buy Plastic Surgery Offices?
Buyer interest in multi-location plastic surgery practices isn’t dropping anytime soon. If you’re looking to connect your cutting-edge practice to stellar value-creation opportunities with private equity, contact Viper Partners, America’s leading M&A transition advisory.
We leverage our exclusive relationships with family offices and private equity-funded support organizations to bring you the best deals. Our team of experienced M&A professionals has closed more than $5 billion in deals since 2009. Schedule your free consultation today!