Why are the multiples less of minority interest purchase than control interest purchase?

The fair market value multiple paid by national ASC companies and health systems (historically in the 5x to 8x range) should be distinguished from the 2.5x to 3x multiple an ASC typically receives when selling interests to an individual physician for a minority interest. The justification for the lower multiple used in a sale to physicians is tied to the limitations and restrictions imposed on their ownership interests (e.g., minimal voting rights, transfer restrictions, buy-back provisions and a non-compete).

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Category: Valuating My ASC

← Why are the multiples less of minority interest purchase than control interest purchase?