Independent Business Valuation Mandate for Transactional Arbitration
Independent valuation of a Swiss healthcare company conducted as part of a neutral transactional arbitration process
Description of the mandate: neutral valuation of a Swiss fertility laboratory in a shareholder arbitration
The engagement focused on the determination of a neutral and objective value for a Swiss company operating a medical laboratory and a fertility centre recognised for its scientific and technological expertise in assisted reproduction. The business valuation was carried out on behalf of both seller and acquirer jointly, in a transactional arbitration intended to resolve valuation disagreements between shareholders.
The valuation aimed to determine the fair economic value while accounting for profitability, recent medical investments and the sensitive nature of the regulated activity (assisted reproduction, Swiss Federal Act on Medically Assisted Reproduction — LPMA).
Key challenges: total neutrality in a joint mandate and sensitivity of a regulated activity
The main challenges of the mandate were:
- ensuring total neutrality in a joint seller/acquirer mandate;
- reconciling divergent interests while maintaining a calm and factual discussion framework;
- assessing the value of specific intangible assets (medical reputation, patient base, scientific partnerships);
- measuring the recurring earning capacity of a model exposed to Swiss healthcare regulation.
Approach and outcomes: cross-checking substantial value, earnings, practitioners, 6-10x multiples and DCF
The valuation deployed several complementary approaches:
- a substantial-value approach to assess the net value of adjusted economic assets;
- a capitalised earnings approach, based on the capitalisation of recurring earnings;
- the practitioners' method, combining earnings and substantial value;
- a transaction multiples approach, based on a sample of comparable clinics and laboratories (observed multiples between 6.0x and 10.0x EBITDA depending on specialisation and technological level);
- a DCF approach incorporating growth assumptions, LPMA regulatory constraints and future medical investments.
The work enabled the determination of a neutral and consensual economic value range, recognised by both parties as a reference basis for negotiation. The analysis highlighted the specific value of medical expertise, the quality of the technical platform and patient loyalty, enabling a dispute between shareholders to be avoided and facilitating an orderly exit from the capital.
Illustrative example: numerical application to a Swiss fertility centre
For illustrative purposes only — unrelated to the actual data of the mandate — a fertility centre generating CHF 8M in revenue with an EBITDA of CHF 2.0M (25% margin typical of the sector) could exhibit an enterprise value range of between CHF 12M and 20M based on 6.0x to 10.0x EBITDA multiples. The practitioners' method (2x earnings + 1x substantial value) provides the consensual median, the differential vs the substantial value isolating the goodwill attributable to medical expertise and patient loyalty.
Summary: 5-week mandate, five cross-checked methods, neutral value for joint arbitration
Business valuation mandate delivered in 5 weeks for a Swiss fertility laboratory in shareholder arbitration. Five methods deployed (substantial value, earnings, practitioners, 6-10x multiples, DCF). Deliverable: independent arbitration-value report recognised by both parties, enabling an orderly capital exit without dispute.
Frequently asked questions: shareholder arbitration, neutrality and regulated activities
How to ensure neutrality in a joint mandate?
Neutrality rests on (i) a strict methodological framework with parallel deployment of several methods, (ii) absolute transparency on assumptions and sources, (iii) an explicit arbitration between the two parties' positions documented in the report, (iv) joint signature of the engagement contract by seller and acquirer, who commit to recognising the conclusions as a discussion basis.
What multiples for Swiss medical clinics?
For clinics and medical laboratories in Switzerland, observed EV/EBITDA multiples range between 6.0x and 12.0x, with dispersion depending on specialisation (fertility, aesthetics, outpatient surgery), technological platform level and rarity of the operating licence. To go further: sector multiples.
How to integrate LPMA regulatory risk?
The Swiss Federal Act on Medically Assisted Reproduction (LPMA) strictly regulates the activity (prohibition of egg donation, embryo limits, mandatory cantonal authorisation). Regulatory risk is integrated via (i) a specific risk premium in the DCF, (ii) legislative evolution scenarios (liberalisation, tightening), (iii) documentation of existing authorisations and their stability.
How long does a valuation for arbitration take?
The standard duration is 4 to 7 weeks, depending on the availability of restated financial data and cooperation from both parties (seller + acquirer). The mandate described was completed in 5 weeks.
Does the valuation have legally binding force?
An arbitration valuation has no binding legal force by default, but (i) it can become so if the parties commit contractually (valuation arbitration clause), (ii) it constitutes a methodologically hard-to-contest negotiation basis, (iii) it strongly limits the risk of subsequent shareholder disputes.
How to value the intangible assets of a medical centre?
The intangible assets of a medical centre (reputation, patient loyalty, scientific partnerships) are valued (i) implicitly via sector multiples, (ii) explicitly via the differential between the capitalised earnings method and substantial value, (iii) by comparison with sector goodwill observed in recent transactions.
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.