GenesisCare USA, the business formerly known as 21st Century Oncology, currently a subsidiary of KKR-backed, Australia-based GenesisCare, announced in June that it filed for U.S. bankruptcy protection. The business has since divested many of its assets, including wholly-owned subsidiary West Virginia Radiation Therapy Centers, Inc., which owns two radiation therapy centers, in Princeton and Fairlea, West Virginia. According to CON filings, the assets of the two centers are being acquired by a subsidiary of U.S. Oncology, the McKesson -owned oncology management company, for $8 million.
Radiation Therapy EBITDA Multiples
The CON filings also include historical financial results and projections, which indicate that the two centers are projected to generate revenue and EBITDA of $7.5m and $3m, respectively, in Year 1 post-transaction (which is very similar to FY 2022 actual results). Financial results are projected to remain steady throughout the five-year projections period included in the filings. As a result, the deal works out to 1.1x revenue and 2.7x EBITDA, the lowest radiation therapy valuation in our database, and one of the lowest across all segments, which is likely a symptom of the forced sale. Radiation therapy is generally a lower multiple business due to significant capital requirements (linear accelerators cost a small fortune) and risks related to significant referral concentration in most cases (primarily medical oncologists and urologists).
About Scope Research
The Scope Research Healthcare M&A Valuation Database currently has financial details for 27 oncology deals going back to 2010, 21 of which include reported EBITDA multiples. The oncology 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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