Education, health, and social assistance business valuations

Education, health, and social assistance business valuations

Education, health, and social assistance business valuations relate to firms engaged in providing education, training and health care.  Valuations also include firms providing allied health services, aged care and disability services site clearing, school education and training and testing support services

Key business valuation considerations in the sector include understanding the human resources, centres, and equipment.

Human resource considerations include the size and capacity of the work force, hours worked, productivity, recruitment and turnover of staff, staff skill levels, qualifications and time with the organisation, staff remuneration and training costs, employment agreements.

Centre considerations may include the location and number of centres, accessibility, local demographics, occupancy rates, operating history, lease terms and capital expenditure requirements.

Equipment considerations may include the current utilitisation rate of the equipment, the target utilisation rate and industry benchmark, the age and state of the equipment and the ongoing capital maintenance expenditure as well as the reinvestment expenditure for growth.

Other key education, health and social assistance business valuation components include government legislation, royal commissions, reforms and funding, patient or student turnover, competitive advantage, intellectual property and brand and barriers to entry.

Experience

Education, health, and social assistance related engagements have included:

• Valuation of an ultrasound recruitment business contracting out allied health workers across Australia. Valuation required for tax purposes in relation to a restructure. Discounted Cash Flow method adopted under the Income Approach. Valuation issues include estimating future revenue given significant recent growth, estimating capacity for staff supply and expansion and expected salaries.
• Valuation of a large national in-home care franchise service group providing services through the home care packages program and disability care through the National Disability and Insurance Scheme. Valuation required for restructuring and for tax purposes.
• Valuation of ordinary and preference shares in a national early learning centre company operating childcare centres. Valuation required for tax purposes in relation to the potential acquisition by a large international private equity firm. Valuation issues included clawback terms linked to future site acquisitions and greenfield site development and the distribution of future preference share proceeds dependent on achieving rate of return hurdles.
• Valuation of shares in an NDIS allied health business involved in speech pathology and occupational therapy. Proceedings in the Supreme Court of Victoria under the shareholder oppression provisions of the Corporations Act. Key valuation issues included impact of changes in NDIS legislation, revenue growth, billable hours, and market salaries for the directors. Income Approach adopted supported by a Market Approach. 
• Pricing guidance in relation to a quickly growing speech pathology and occupational platform. Valuation provided for possible capital raise.
• Valuation of an allied health business specialising in exercise therapy and physiology. Expert determination report prepared to assist in a shareholder dispute.
• Valuation and pricing advice in relation to the potential acquisition of a physiotherapy practice. Analysis provided on normalised cash flows, revenue trends, potential risks and capacity.
• Valuation of a radiology practice. Valuation required per the requirement of the shareholder’s agreement.