GROWING INCOME AND VALUE
We started this center with 7 ophthalmologists and quickly expanded to 15. It had good margins and cash flow but needed a growth strategy. We recommended a plan focused on orthopedics and neurosurgery, and created a new organizational structure and governance to deal with issues between the different specialties. Our 5-year business plan showed growth in ordinary income as well as the market value of individual physician shares in the event of a capital gain transaction. This helped the legacy physicians (with different ages and agendas) as well as the targeted physicians analyze the investment opportunity in a thorough and financially sophisticated manner.
As a result, the center added 10 orthopedic and neurosurgeons, maxing out the OR capacity, and increasing revenues and EBITDA by 400%. Two years later, the enterprise value increased from $10 million to $36 million. A local hospital is pursuing the acquisition of a 51% stake in the facility.