WHAT IS YOUR DRUG REHAB FIRM WORTH?The Addiction-Rep team has extensive experience in the various disciplines necessary to underwrite your business.
*(there are many instances that do not involve a sale of the firm).
The Addiction-Rep team can provide valuations for all of the situations listed above. Part of our report will be a benchmark report comparing revenue, expenses, and profit of your firm with similar firms.
Addiction-Rep has a policy that your first call for input and guidance on valuation, merger & acquisition activities is free, with no commitment required from your firm and is completely confidential.
How does Addiction-Rep determine value?
There are three recognized approaches to valuing a Drug Rehab services firm.
They are:
The Income Approach is the most widely used approach in the Drug Rehab industry and many other industries. It is recognized by most legal authorities and professional valuation organizations throughout the U.S.
The Discounted Future Earnings Approach, this approach values the business by looking at the current and future earnings stream of the business.
The Market Based Approach uses industry comparables of like-sized companies to derive a valuation based on multiples of earnings.
There are other approaches of course but, based on our experience, these three approaches are used by almost all buyers on a national, regional, or local basis without regard to size.
The Income Approach is the most common method for valuing addiction treatment businesses. In addition, we can provide an opinion of value on your Real Estate.
EBITDA is the calculation for the income approach. It stands for Earnings before Interest, Taxes, Depreciation and Amortization.
The Income Approach determines the income from the business over a certain period and then applies a Multiple of that income to determine the value.
The Time Period Used for Calculating EBITIDA includes a three-year lookback.
Adjustments or add backs are made to the income and expense side to standardize the valuation process and arrive at a value that is line with the market definitions.
Multiples: A multiple is calculated against this income to determine the value of the firm. The multiples vary according to the market conditions, location, and the size of the firm as well as other factors.
This model suggests that the value of the business is better measured by looking at the current and future earnings stream of the business. There are two inherent challenges in this process:
The market-based valuation relies upon the comparison of the subject business to similar businesses that have sold. The Addiction-Rep team utilizes multiple sources of market data:
Typically, we utilize private Drug Rehab company sales data, and select firms that resemble the subject business in terms of financial and operational characteristics. The Drug Rehab team only works in Drug Rehab valuations and utilizes a database in this field.
We employ the Comparative Transaction Method to estimate the value of the subject business. By using this method, we determine valuation multiples which relate the measure of business performance to the potential selling price.
Typical multiples are:
The most common method is the Price divided by the Historical Average Adjusted EBITDA.
We rely on multiple methods and apply a weighted average to provide an estimate of the subject’s business value. This blended value is called the “Enterprise Value.”
The formula is straight forward:
Business Valuation Method / Value Multiplied by Weight Percent= Weighted Values.
Weighted Values added together = Enterprise Value.
The Addiction-Rep team has extensive experience in the various disciplines necessary to underwrite your business.
What does an Addiction-Rep valuation provide to you?
For more information, please call or email
Fred Schmidt-Managing Director
(908) 377-1616
[email protected]
Jim Peake-Managing Director
(781) 222-0000
[email protected]
Fred Schmidt is Managing Director of Addiction-rep, he has 44 years of commercial real estate services experience, and has led commercial real estate services operations on a local, regional and global basis. He drives the firm’s business engagement strategy for Addiction-rep. The Addiction-rep team provides Strategic Planning, Marketing Services, Merger & Acquisition and Valuations for behavioral services firms. He has been involved with over 80+ Merger and Acquisition transactions throughout his career.
Prior to Addiction-rep he served as President and COO of Coldwell Banker Commercial and Commercial Leader for the Realogy family of companies. In that role he oversaw the operations of over 270 locations in 44 countries, consisting of 3,000 professionals. He supervised the delivery of all services to clients including the Global Client Solutions team, they included advisory and transaction services, project management, facilities management, financial solutions and site selection services.
Prior to his role at CBC/Realogy he was the Managing Director for the Northeast Corridor at United Systems Integrators a Corporate Services Firm that is now part of Johnson Controls. He spent 20 years at CBRE in the New York region and was one of the founding members of the CBRE Corporate Services team, he assumed the challenge of building the corporate services outsourcing with corporate clients.
Resides in Summit, NJ
In 1982 Jim started in direct mail in catalogs etc. By 1994 he started a digital imaging company called the Digital Mint. He later joined K2 Design who, during the silicon alley dot com boom, went public on the NASDAQ. One of his notable projects with K2 was Kasparov vs. IBM’s Deep Blue supercomputer in 1996. He built/sold several websites for AOL, Prudential Securities, Oppenheimer Funds amongst others.
In 1996 Jim moved to Boston and joined an MIT startup, building and selling database driven websites. After the dot com bust, he entered the Speech Recognition business with Audiopoint and Voice Access Technologies. Following the Speech Recognition opportunity, Jim became an independent consultant and picked up a gig with a medical magazine publisher. He was tasked with building an ad network and signing big pharma companies. After the ad network consulting project Jim became a consultant for a drug rehab treatment directory taking them from $300K in annual top line revenue to $300K in profit per month in less than 24 months.
In 2008 Jim formed Addiction-Rep providing website design and development, SEO, PPC and social media services to the drug rehab industry.
Jim has been facilitating the buying, selling and funding of drug rehabs since 2018. He also spearheaded a funding, sales and marketing effort with an Indiana start up that created a breakthrough medical device for addicts (the Bridge Device).
With over 40 years in business and many connections Jim has assembled an all-star team of industry veterans in very specific skill sets to serve our clients. Our industry focus is Behavioral Healthcare, Senior Living and Drug Testing Labs serving them with Advisory, M&A, Management Consulting and Digital Marketing services.
