Ophthalmology Industry Trading Multiples and Recent Buyers

In the first part of our look at merger and acquisition activity in the ophthalmology industry, we examined ophthalmology practice valuation strategies and the buying/selling process.  In the second part, we look at the trading multiples that ophthalmology practice sellers could expect to see in today’s market, and a few of the recent larger transactions by private equity players who now view ophthalmology practices as valuable part of the continuum of care, a new target with its own unique strengths and growth opportunities.

Trading multiples in today’s ophthalmology market:

• Generally, smaller practices are being acquired from 7x to 9x EBITDA*
• Platforms are trading anywhere from 11x to 15x EBITDA*

Recent mergers and/or acquisitions in today’s ophthalmology market**:

• Shore Capital Partners bought Florida Eye Microsurgical Institute (addition to EyeSouth Partners group) in Aug. 2018
  Shore Capital Partners’ eye care platform EyeSouth Partners completes acquisition of Florida Eye Microsurgical Institute and Boynton Beach ASC, expanding its presence in the south Florida region.
• Ridgemont Equity Partners bought Ophthalmic Specialists of Michigan in Dec. 2018
  As a new player in the ophthalmology space, Ridgemont’s first and only acquisition to-date is Ophthalmic Specialists of Michigan (“OSM”), a leading eye care practice located in Southeast Michigan.  Ophthalmic Specialists of Michigan will seek expansion throughout Michigan and the surrounding states.
• Shoreview Industries bought California Retina Associates in Feb. 2019
  Minneapolis-based ShoreView Industries acquired California Retina Associates (“CRA”), a leading thirteen-physician group with its own ambulatory surgery center and offices in Chula Vista, La Mesa, and El Centro, California.  ShoreView follows in the steps of Quad-C Management (which acquired NJRetina) as the second private equity investor to enter the ophthalmology market with a major retina subspecialty practice acquisition.

It is advised to contact a professional to help guide you throughout the sale process.  CIG Capital Advisors’ Business Advisory Services professionals can help you determine which valuation method is most appropriate for your unique practice and guide you through a potential buying or selling scenario.  Schedule a complimentary consultation with a CIG professional today to begin the valuation process for your ophthalmology practice.

*Source: https://www.stout.com/en/insights/industry-update/eyes-ophthalmology-ma-opportunities/
**Source: https://www.mcguirewoods.com/client-resources/Alerts/2019/2/2018-physician-practice-consolidation