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Population Health EBITDA Multiples: Steward Medicare VBC Acquisition by CareMax (21x EBITDA)

In November 2022, CareMax, Inc., a leading provider of technology-enabled value-based care to seniors, announced the completion of its acquisition of the Medicare value-based care business of Steward Health Care System. The acquisition encompasses Steward's Medicare Direct Contracting Entity (DCE), a Medicare Advantage plan, and two Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs). With this acquisition, CareMax's network expands to approximately 2,000 providers and over 200,000 senior value-based care patients in 10 states across 30 markets.

Value Based Care EBITDA Multiples (ACOs, CINs, DCEs, IPAs, MSOs, PHOs)

Total consideration included cash of $25 million and stock worth $134.4 million. The transaction also included an unusually large amount of contingent consideration, with a fair value of $212.4 million, and other consideration of $27.2 million. The total consideration of $399 million implies a multiple of 21x estimated 2023 EBITDA of $19m. This is an unusually high multiple for a multi-provider network / value-based care deal, likely due to the extreme growth projected by CareMax management and the significant percentage of contingent consideration.

Steward's Medicare value based care business was projected by CareMax to experience explosive growth over the next few years.
Steward Value Based Care Financial Projections

Not surprisingly, the implied multiple looks like a total outlier compared to handful of other multi-provider network deals where we have disclosed financial details:

Steward's Medicare value based care business was acquired at an unusually high multiple of current EBITDA
Value Based Care EBITDA Multiples

About Scope Research

The Scope Research Healthcare M&A Valuation Database currently has financial details for 124 managed care deals going back to 2010, 73 of which include reported EBITDA multiples. The managed care database can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.

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