The Paragon Process - Step by Step
Valuations - Pre-Market Assessment
If you are considering selling your business within the next year or so, the time to start is now. Strategic planning far in advance of the actual event can significantly add to the eventual sales price.
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PARAGON PRIVATE
CLIENT GROUP
We explore the relationship between buyers and sellers to consummate transactions within specific healthcare sectors. The Paragon Concentrix Ratings are designed to provide an easy reference of the supply and demand for each niche business segment. It monitors and balances current buyer appetite with seller interest and the strength of market valuation. Concentrix ratings and market maker categories are based on trends of actual transactions closed within the past 18 months, public and private acquisition profiles and interviews conducted by Paragon Ventures across the spectrum of buyers. Many subjective and objective factors are used to influence our Concentrix ratings including revenue size and profitability levels of each enterprise. Valuation ratings are a blend of strategic and financial sponsor valuation criteria. A five year rolling average is used to determine relative strengths and weakness in the current market.
Update Year End 2006
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RESPIRATORY PRODUCTS AND SERVICES
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Respiratory - Compared to 2004 and 2005, the acquisition appetite of the national strategic buyers has slowed considerably. Local and regional buyers (along with private equity firms for larger opportunities) has filled the gaps in many markets. Valuations are slightly depressed based on the effects of reimbursement changes on earnings. Diversity of payors and non-Medicare diversity has supported premium valuations... especially in key geographies. Respiratory meds business valuations is substantially depressed.
Paragon Buy/Sell Concentrix rating: B5/S7 - Valuations: V5
Current Market Makers: A few strategic national buyers - Local/Regional strategic buyers - Geographic expansion and competitive bidding position buyers
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DURABLE MEDICAL EQUIPMENT (DME)
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DME - Larger, multi-location retail operations in demand. Some buyers looking for DME only businesses with strong community presence. Stronger valuations than in prior years for those DME businesses with strong retail, private pay and non-Medicare payor mixes.
Paragon Buy/Sell Concentrix rating: B6/S8
Current Market Makers: A few strategic national buyers - Local/Regional strategic buyers - value investors - - Buyers seeking diversification
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MEDICAL SUPPLIES
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Medical Supplies - Diabetic, Incontinence, Urologicals, Enteral - Strong market and premium valuations. Diversified payor mix. Growing buyer universe.
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Paragon Buy/Sell Concentrix rating: B7/S7
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Valuations: V8
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Current Market Makers: Multiple strategic national buyers - local/regional strategic buyers - national distribution companies - strategic private equity firms - value investors - - Buyers seeking diversification
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HOME INFUSION THERAPY - SPECIALTY PHARMACY
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Infusion/specialty pharmacy - Very strong market with growing buyer pool. Premium valuations being paid for larger well established, profitable companies with 15%+ EBITDA, annual growth and diversified therapies. Trend continues to gain momentum based on growth of the infusion market, convergence of infusables and increased utilization of pharmaceuticals.
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Paragon Buy/Sell Concentrix rating: B10/S8 - Valuations: V9
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Current Market Makers: National strategic buyers - Strategic private equity firms for both platform opportunities and add-on acquisitions - - Buyers seeking diversification
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HOME HEALTHCARE - NURSING SERVICES
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Home healthcare/nursing - Current market upswing with many buyers looking for critical mass in key markets. Many buyers keying on the strong growth trends and the ability to realize significant cost savings with buyer synergies and integration... leading to improved profitability.
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Paragon Buy/Sell Concentrix rating: B7/S7 - Valuations: V7
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Current Market Makers: National strategic buyers - Regional strategic buyers - Critical mass investors
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SLEEP DIAGNOSTICS - SLEEP LAB
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Sleep Diagnostics - Strong market for established sleep labs with turn-key operations - Many buyers looking in key markets.
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Paragon Buy/Sell Concentrix rating: B7/S5 - Valuations: V7
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Current Market Makers: National strategic buyers - Regional strategic buyers - Individual investors
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Year end 2006 continues a healthy market for sub-acute healthcare providers and suppliers with reasonable expectations for the valuation of their businesses. Of course, each situation must be judged based on its individual merits. However, for those looking to execute a well planned exit strategy for a well established, profitable and properly prepared business, the market (with a few exceptions) in many sectors, is strong. Supply and demand plays a critical factor in every M&A market.
For those looking to acquire, the breadth of acquisition options and the number of sellers willing to entertain suitors leads us to believe that healthcare mergers and acquisitions activity will continue to increase well into the foreseeable future.
For more information on our State of the Market report and Concentrix ratings, please contact Paragon Ventures at 800-719-1555.
Paragon Ventures is one of the nation's leading specialists in the merger, acquisition and divestiture of private mid-market companies. As an intermediary with experience and expertise we can facilitate the entire process of buying or selling a business. We specialize in the health care industries including all aspects of the home healthcare, respiratory care, infusion therapies, nursing services, medical manufacturing, distribution and related medical technologies.
Paragon Ventures follows a proven process for success where we can consistently and reliably perform. Our mission is to Unlock the Value, Create Opportunity and Achieve Results. Paragon Ventures best serves established, profitable, mid-market companies who are looking to either acquire synergistic organizations or execute an exit strategy.
Whether you are looking at purchasing a business or trying to sell your own company, we are committed to facilitating the process from beginning to end.
Paragon Ventures' extensive transactional experience throughout the healthcare industry including:
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We have developed the effective strategies, proven processes and extensive buyer relationships which deliver the maximum Real Value® for our clients during the sale or merger of their company.
Our client reference list is available upon request, please call 800-719-1555.
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It's All About Value
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Click here to view our Capabilities Brochure
800-719-1555
If you are interested in new growth opportunities, consolidation or selling your existing business, feel free to call one of the Paragon Ventures™ partners directly with any questions you may have or complete our on-line inquiry form.
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1-800-719-1555.
"We are what we repeatedly do... Excellence, then, is not an act but a habit."
Aristotle