Why Valuations May Rise in 2021 – And Why You May Not Care
If you’re in the predictions game and you’re paying attention, you can see that just off in the distance several factors are lining up perfectly to collide in 2021 to propel valuations.
Will a Stay Calm and Carry-on Mindset Beat Back Stubborn COVID Headwinds?
Good question. Glad we asked it. No doubt this is a fluid situation. In fact, given what has transpired in just the past week, our answer today could very well go back to the future in 30 days or so (more on that below). But right now? There is evidence – mostly anecdotal at this point – that the M&A world is beginning to awaken from the Big Sleep.
Will COVID-19 Provide Cover to Corral Value Multiples?
Last summer, we noticed a peculiarly interesting article about what had become a runaway lending environment. Debt capacity had risen as high as 6-7 times EBITDA. What’s more, EBITDA was fast becoming a proforma, go-forward, if-everything-goes-perfect figure. In other words, a substantially puffed up version of the truth that effectively added another 1-2 turns of EBITDA that lenders were willing to put up.
Truisms in Mergers and Acquisitions
After 20 years and more than 325 health care deals closed, we’ve seen a lot. Here are some things we’ve learned. If someone says, “it’s business, nothing personal,” it isn’t, and it is. Nothing good can happen between a letter of intent and closing.
Amedisys Buys Compassionate Care for $340M, Will Become Third-Largest US Hospice Provider
Upon completion of acquiring Compassionate Care Hospice for $340 million, Amedisys will become the third-largest hospice provider in the country. Most hospice transactions are being valued at 16 to 19 times EBITDA, and 20 transactions have been PE-backed in 2018. Managing Director Mark Kulik gave insight to Home Health Care News as to why valuations are