Frequently Asked Questions

Your practice is worth more than you think! DSO’s and PEG’s value practices based on a multiple of free operating cash flow (aka EBITDA). In general, multiples climb as EBITDA grows.
Examples:

• $1m EBITDA sells for 7x multiple = $7m Total Enterprise Value
• $5m EBITDA practice sells for 10x multiple = $50m Total Enterprise Value

• Most of the group practices that we represent come to us with one or more offers in hand. We consistently improve their Total Enterprise Value by 30-90% over their top unsolicited offer and greatly improve upon the deal structure and terms.
• Do not be deceived by a high headline multiple. Any buyer would be willing to pay you 10x, regardless of your practice size, if they get to determine the EBITDA. Let TUSK take your real EBITDA to market and get you maximum value for the asset you have worked so hard to create.

• Multiples generally grow with EBITDA, but many other factors influence the multiple buyers are willing to pay.
• Buyers are looking for consistent historical growth, attractive payer mix, high doctor, staff, and patient retention, high collections ratio, low AR, organic growth opportunities, reputation for clinical excellence, attractive procedure mix, complementary geographic footprint, streamlined and scalable systems and processes, and more.
• Competitive processes consistently drive multiples. Through our marketed sales process, we consistently beat unsolicited offers by 30-90%.

Competitive marketed processes typically take 6-9 months from signing of TUSK’s engagement agreement to close of the transaction.

It is important to align not only on the valuation they’re giving you for your business, but also on the team, their track record, their timeline, their strategy, and their culture. Most of our sellers stay on for 3-5 years post close and roll 20-40% of their equity into the future partnership, so it is important to be aligned with the DSO or PEG that buys your practice.

• Transactions are complex and time consuming. Having a representative and advocate will save you time, maximize your deal value, and get you the best structure possible.
• TUSK’s seasoned analytics team rebuilds your financials from the general ledger up, identifying every penny that can be added back to maximize your EBITDA. Without an analytics team fighting for your EBITDA, buyers can layer on additional costs or exclude meaningful add-backs from their buyside analysis.

• TUSK is paid a success fee at the close of the Transaction. If you do not sell your practice, you don’t owe us a penny.
• Because our success is a percent of Total Enterprise Value, we are 100% aligned with your goals, working side-by-side with you to maximize your EBITDA and your multiple.

• We bring 4 or more offers to the table for the vast majority of our sellers.

Preparation 4-6 weeks

• TUSK + client kickoff call
• Populate virtual data room
• TUSK deep dive into financials
• Develop initial valuation model
• Add-back call

Marketing 4-6 weeks

• Finalize valuation model
• Develop marketing materials
• Announce deal to buyside
• Get NDA’s signed
• Grant buyer access to virtual data room

Bids 8-10 weeks

• Calls with prospective buyers
• Receive, review, and model offers
• Recommend, select, and notify continuing participants
• Conduct in-person meetings with final buyer pool
• Negotiate best deal terms
• Sign LOI

Exclusive Diligence 12-16 weeks

• Quality of Earnings
• Legal diligence
• Negotiate final deal terms
• Close transaction

DSOs and PEGs do not want to manage the clinical side of your business. They are focused on streamlining the business operations to enable doctors to focus on patient care.