Correlating Industry Trends With Imaging-Center Value

December 17, 2012
Published by ImagingBiz While consideration of the individual facts, circumstances, and local competitive position of each subject imaging center is integral to an accurate business-valuation analysis, a thorough understanding of the state of the imaging industry—particularly the acquisition environment—is crucial to performing an accurate and complete valuation. Radiology Business Journal recently published the results of its third annual survey¹ related to the top 20 imaging-center chains and the larger economic environment in which they operate. These data can be used to gain a better understanding of how the valuation of imaging centers will trend in 2013 (and beyond). Industry data, such as those in the imaging-center–chain survey, are very important to valuation analysis. Properly incorporating such industry data into the key assumptions and components of the valuation transforms the valuation analysis from a mathematical exercise into a meaningful and useful assessment of the market value of the subject imaging center. As the trend toward consolidation in the marketplace continues, it will be critical for owners of imaging centers to understand the value of their organizations fully—the better to assess their options as the marketplace evolves.

Key Valuation Takeaways

Many trends identified in the survey are positive, from a valuation perspective. As in the past nine out of 10 years, the number of total imaging centers increased in 2012. This increase in total imaging capacity is interesting, given the challenging reimbursement environment, and might be attributable to an anticipated increase in total patient volume following the implementation of the individual mandate of the Patient Protection and Affordable Care Act in 2014. The imaging-center chains that made it into the top 20 remained stable, signifying that large industry players are maintaining and/or growing their strength in the marketplace. In total, the top 20 companies increased the number of centers owned by over 100 centers. It is interesting that a large number of the additions were acquisitions, indicating that there is clearly an active market for imaging centers. This active market is a hallmark of a healthy industry. The data in surveys such as this can provide assistance to the valuation analyst in formulating a basis for both growth assumptions and acquisition-market conditions. Click to continue to the full article.