Business Valuation Mandate for a Private Healthcare Establishment
Independent valuation of a private healthcare clinic conducted in preparation for a capital reorganisation and investor entry
Description of the mandate: valuation of a Swiss private healthcare establishment in capital reorganisation
The engagement focused on the determination of the fair economic value of a private healthcare establishment in French-speaking Switzerland operating in surgery, physiotherapy and specialised medicine. The business valuation was carried out on behalf of historical shareholders, in the context of a capital reorganisation ahead of the entry of a new shareholder intended to support development.
The establishment had a modern technical platform, a capacity of several dozen beds and a multidisciplinary medical staff recognised for its expertise.
Key challenges: grasping performance in a regulated environment and identifying value-creation levers
The main challenges of the mandate were:
- grasping real economic performance in a heavily regulated environment;
- identifying sustainable value-creation levers in the healthcare sector;
- determining an economic value range consistent with operational reality and the future investment project (new physiotherapy platform);
- providing a discussion basis between shareholders and potential investors.
Approach and outcomes: cross-checking DCF, 8-12x EBITDA multiples and practitioners' method
The valuation deployed several complementary approaches:
- a discounted cash flow (DCF) approach, suited to the stability of medical revenue and incorporating the new platform's CAPEX;
- a relative approach, based on multiples observed in the private hospital sector (typically between 8.0x and 12.0x EBITDA depending on specialisation and real estate structure);
- the practitioners' method, annexed to the valuation report as a complement;
- an explicit articulation with IVS and Swiss valuation standards.
The valuation established an enterprise value range of between CHF 10M and 15M, consistent with Swiss sector references and growth prospects. The work secured financial governance and prepared the introduction of a strategic partner while respecting medical continuity.
Illustrative example: numerical application to a multi-specialty healthcare establishment
For illustrative purposes only — unrelated to the actual data of the mandate — a private healthcare establishment generating CHF 8M in revenue with normalised EBITDA of CHF 1.3M (16% margin) could exhibit an enterprise value range of between CHF 10.4M and 15.6M based on 8.0x to 12.0x EBITDA multiples. The integration of the new physiotherapy platform's CAPEX (CHF 2-3M) in the DCF translates into a growth premium compensating for the investment effort and supporting the high end of the range.
Summary: 4-week mandate, three cross-checked methods, CHF 10-15M EV for reorganisation
Business valuation mandate delivered in 4 weeks for a Swiss private healthcare establishment in capital reorganisation. Three methods deployed (DCF, 8-12x EBITDA multiples, practitioners). Deliverable: enterprise value range of CHF 10-15M serving as a discussion basis between historical shareholders and potential investors.
Frequently asked questions: hospital multiples, IVS, technical platform and medical continuity
What multiples for private healthcare establishments in Switzerland?
For private healthcare establishments in Switzerland (clinics, medical centres), observed EV/EBITDA multiples range between 8.0x and 14.0x, with dispersion depending on (i) specialisation (elective surgery, fertility = high end of range), (ii) real estate structure (ownership vs lease), (iii) share of private insurance patients, (iv) technical platform quality.
How to integrate future CAPEX into the valuation?
Future CAPEX (new platform, equipment modernisation) is integrated via (i) a DCF with detailed projection of disbursements, (ii) a return-on-investment analysis (additional revenue generated), (iii) a scenario with and without CAPEX documenting the growth premium, (iv) consideration of financing (debt, equity) in the target structure.
Why a valuation before an investor entry?
A pre-investor valuation provides (i) a reference price for pre-money negotiation, (ii) substantiated defence against potential challenges, (iii) objectification of shareholder expectations, (iv) methodological credibility appreciated by institutional investors.
How long does a healthcare establishment valuation take?
The standard duration is 3 to 6 weeks, depending on the availability of restated financial data (physician compensation, sector WC, CAPEX) and perimeter complexity. The mandate described was completed in 4 weeks.
How to ensure medical continuity during a capital reorganisation?
Medical continuity is ensured via (i) contractual commitments from the investor on care standards, (ii) medical representation on the board, (iii) contractualised quality indicators, (iv) a founders' veto right on decisions affecting medical practice.
Is the report usable for transactional documentation?
Yes. An independent report compliant with IVS constitutes (i) a technical reference for transactional documentation, (ii) a potential fairness opinion for the board of directors, (iii) a basis for the shareholders' agreement and exit clauses. To go further: shareholders' agreement.
Similar mandates: other business valuations in healthcare
The transactions shown include those completed by, or with the involvement of, Hectelion team members in current or previous professional roles. They are presented for illustrative purposes only and do not imply exclusive responsibility by Hectelion.
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The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.