Tri-State Surgical Center Portfolio, 11-12 NY/NJ Ambulatory Surgery Centers

$230.0M

Revenue

$55.0M

SDE

6.4x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a portfolio of 11 to 12 ambulatory surgery centers spread across New York and New Jersey, each ranging from 9,000 to 25,000 square feet. The centers deliver a broad outpatient surgical menu including general, orthopedic, spine, vascular, urologic, ophthalmic, gynecologic, and plastic surgery, plus GI procedures, pain management, podiatry, and adult and pediatric ENT. Roughly 210 employees (150 full-time, 60 part-time) staff the network alongside a bench of specialized surgeons and an executive management layer that already runs day-to-day operations.

The seller reports combined annual revenue of roughly $230 million split between the two states, with $55 million in net cash flow. The centers accept both in-network and out-of-network insurance, which is a meaningful economic lever in the ASC world where out-of-network billing and reimbursement mix drive a large share of margin. The founder is retiring after two decades and is positioning the portfolio squarely at healthcare operators, private equity, and venture capital.

At a $350 million asking price against $55 million of SDE, this is a 6.36x deal that sits well above the typical single-site healthcare comp because of scale, diversification across specialties, and an existing management infrastructure. The real question for a buyer is not whether outpatient surgery is a durable business (it is) but whether that reported cash flow is clean, sustainable, and independent of a payer mix that regulators and insurers are actively squeezing.

Why we like it

Outpatient surgery is structurally recession-resistant demand. People need orthopedic, spine, vascular, GI, and ophthalmic procedures regardless of the economic cycle, and the industry-wide shift of cases from hospitals to lower-cost ASCs is a decade-long tailwind that this portfolio is already positioned inside.
Scale and diversification reduce single-point risk. Eleven to twelve centers across thirteen-plus surgical specialties in two states means no single facility, specialty, or physician group can sink the whole thing, which is rare in healthcare deals that usually hinge on one or two rainmaker surgeons.
The business is already manager-run with an executive team and clinical staff in place. The founder is retiring rather than being the operator on whom everything depends, so a PE or strategic buyer inherits functioning infrastructure rather than having to rebuild leadership from scratch.
The 24 percent SDE margin on $230 million of revenue is strong for the category and reflects the profitability advantage ASCs hold over hospital outpatient departments. If verified, that margin supports both debt service and reinvestment at this multiple.

How to improve it

Audit and optimize the payer mix immediately. The listing flags acceptance of both in-network and out-of-network insurance, and out-of-network economics are volatile under the No Surprises Act; renegotiating in-network contracts and modeling reimbursement scenarios protects the cash flow that justifies the price.
Standardize operations and supply chain across all centers within the first quarter. With 11-12 facilities there is almost certainly variance in case throughput, implant and device purchasing, and staffing ratios; a group purchasing arrangement and shared scheduling can add margin without new revenue.
Recruit and lock in physician relationships with equity or long-term agreements. ASC volume follows surgeons, so the durability of the $55 million depends on retaining the referring and operating physicians; syndication models that give surgeons ownership stakes align incentives and defend case volume.
Increase utilization of existing block time and operating rooms. The listing itself points to advertising as a growth lever, but the faster win is filling underused OR capacity through better scheduling, added case types, and physician recruitment before spending on marketing.
Add or expand high-margin service lines such as GI, pain management, and orthopedics where reimbursement and volume are favorable. Underused square footage in the larger 25,000 sq ft centers can be repurposed to grow procedure mix without new real estate.
Implement a real revenue cycle management overhaul. In a network billing $230 million, even a few points of improvement in denial rates, coding accuracy, and days-in-AR translates to millions in recovered cash flow, and this is the single most controllable lever post-close.
Build a formal quality and accreditation program across all sites. Consistent accreditation and outcomes data both reduce regulatory risk and strengthen negotiating position with payers, which directly supports the reimbursement assumptions underpinning valuation.

Diligence notes

Verify the reported financials with audited statements, not seller representations. A $55 million cash flow figure on a brokered listing with rounded numbers and an anonymous location behind an NDA demands independent CPA-verified P&Ls, tax returns, and center-by-center financials before any offer is credible.
Scrutinize the out-of-network revenue exposure in detail. If a large portion of the $55 million derives from out-of-network billing, that income stream is under active pressure from the No Surprises Act and payer clawbacks, and the sustainable, in-network-adjusted cash flow could be materially lower than stated.
Confirm the ownership and legal structure of each center, including any physician syndication and Stark Law, Anti-Kickback, and corporate practice of medicine compliance. Multi-site ASC portfolios carry significant regulatory risk, and non-compliance can create both deal-killing liabilities and reimbursement exposure.
Map physician concentration and contract status across all specialties. Determine what share of volume and cash flow depends on the top handful of surgeons and whether they are contractually committed post-sale, because losing key physicians directly erodes the earnings you are paying 6.36x for.
Clarify the real estate situation for all 11-12 facilities. The asking price appears to exclude real estate, so confirm lease terms, rents, renewal options, and landlord relationships since ASC economics are sensitive to occupancy costs and lease continuity.
Interrogate the reason a $350 million asset is listed on a retail SMB marketplace through a broker who forbids co-brokering. Assets of this size normally transact through healthcare-focused investment banks, so validate legitimacy, proof of ownership, and whether the portfolio is a single consolidated entity or a loosely aggregated collection before spending diligence dollars.

Source

Originally listed on BizBuySell. View original listing →