Company Overview
American HealthCare Capital is pleased to introduce one of the premier independent sleep disorder clinics for sale in California. Founded 20 years ago, this is a multi-location attended and ambulatory sleep diagnostic & consultation clinic, DME provider, and medical research/sleep equipment validation facility with four licensed locations in the heart of a highly populated part of the state.
Financial Overview
As a comprehensive, full-service sleep clinic, the company offers a wide range of diagnostic sleep services, including physician consultations, in-lab testing (PSG/MWT/MSLT/Titration), home sleep testing (HST), and therapy options and dispensing such as CPAP, Auto-PAP, and Bi-level devices. All locations utilize Alice5 equipment. 2022 revenues were $3.5 million with an adjusted EBITDA of $1.5 million. The diagnostic sleep clinic’s sites were closed from mid-2020 to the end of 2021, so revenues in 2021 and 2020 were $1 million and $1.32 million, respectively, with breakeven adjusted EBITDA after PPP loans. In 2019, revenues were $2.8 million with an adjusted EBITDA of $473,334.
The company has an impressive database consisting of more than 52,000 patients and 2,500 referring MDs. Reimbursement for services is 68% commercial insurance, 31% Medicare, and less than 1% private pay. Given its extremely large database of patients, the sleep diagnostic center has been in a prime position to capture lucrative research revenue from conducting validation studies for sleep drugs and equipment, including wearables, for an impressive roster of technology clients. Given that margins in the research space are much higher (40-55%) than those of traditional sleep studies/DME alone, coupled with the company’s unique position as a leader in this space, this revenue stream represents a high growth area for the company on an ongoing basis.
Finally, the seller of this medical research clinic has developed their own proprietary software to manage all operational aspects of the business, including billing, DME inventory management and dispensing, and compliance. The future owner will find it quite easy to integrate the company’s processes into its own, as the software has several integration paths through which it can collaborate with other systems. This software can be leased by the buyer; however, if the buyer chooses to purchase the software (for a separate price to be determined), a myriad of opportunities exist to leverage or even spin off some of the component modules.
Asking Price
The asking price for the sleep disorder and diagnostic clinic/center (excluding the proprietary operational management software) is To Be Determined. The owners are looking to sell to enjoy more time with their growing family. Existing staff is expected to stay on post-sale, and the owners are willing to assist during an agreed-upon transitional period and/or provide consulting services if requested.
