VIDEO: Private equity transactions still lucrative despite decrease in market value
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Key takeaways:
- Valuations have leveled off or decreased since the end of 2022.
- Large platform practices may experience a greater decrease in valuations compared with small- to mid-sized practices.
In this video, Gary W. Herschman, JD, discusses the status of market values related to physician practices.
“Valuations were high in 2021. And toward the end of 2022, they were still robust but either leveled off and, in some cases, notched down a little bit,” Herschman, an attorney in the health care and life sciences practices of Epstein Becker Green, told Healio.
Herschman noted while large platform practices may be experiencing a decrease in valuations, small- and mid-sized groups may only experience one or half times the difference in earnings before interest, depreciation and amortization.
“I have heard, from speaking to investment bankers, that maybe it’s notched slightly down for smaller groups, less so than for larger platform groups,” Herschman said.
Although Herschman said he cannot see valuations coming back to levels achieved in 2021 in the next couple of years, he added that “transactions are still lucrative and beneficial for physician groups.”
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