Charleston Area Medical Center has announced it filed a letter of intent with the West Virginia Health Care Authority to purchase a majority stake in Charleston Surgical Hospital. CSH is currently owned by a diverse group of physician surgical specialists and has provided inpatient and outpatient surgical services in the Charleston area for decades. Existing management and employees will remain as employees of the hospital once the purchase is complete.
Surgical Hospital EBITDA Multiples
According to the state CON filings, the purchase price is $55.8 million for a 70% interest. The purchase will be financed with debt, but no existing debt will be assumed, implying a total enterprise value of $79.7 million. With revenue of ~$37m and EBITDA of ~$9.9m per CSH's Medicare cost reports, the deal implies multiples of 2.2x revenue and 8.1x EBITDA.
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