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Orthopedic Practice and Physical Therapy Business Valuation

Client/Profile

Regional ten-hospital health system

Challenge/Situation

To prepare a business valuation for a 15 physician, multi-location orthopedic practice with a significant physical therapy division to support a transaction whereby the orthopedic practice would be acquired by the health system’s physician entity and the physical therapy division would be acquired by a separate rehabilitation entity.

Veralon was also asked to design a physician compensation plan that would be competitive, financially sustainable for the health system and consistent with fair market value.

Process

Veralon was able to successfully divide the expenses and revenues of the practice into the professional and physical therapy division to support the two transactions, which closed.

Results

We developed a compensation model that not only was accepted by all 15 physicians, but has been utilized by the health system in subsequent unrelated transactions.