There is a growing demand in the ambulance service industry as more municipalities and counties are contracting with private ambulance services. Many prospective buyers are intrigued by the possibility of purchasing an ambulance service company. If you own an ambulance service company and are planning your exit strategy, then now is the time to look into selling. This review from a professional business broker provides an overview of the ambulance service industry, insights on how to value your company, and a step-by-step process for selling your ambulance service company.
An Overview of The Ambulance Service Industry
The ambulance service industry includes organizations that provide transportation services with medical care. This could be in the form of ground transport, air transport, or both. Many ambulance service companies operate as contract ambulance service providers and as 911 ambulance service providers. Notable data about the ambulance service industry include:
- There are approximately 23,000 ambulance service companies in the U.S.
- There was a -0.04% decline for the ambulance service industry from 2018 to 2023
- The ambulance service industry generates $18.2 billion in annual revenue
- The annual profit for the ambulance service industry is $1.7 billion
- Experts predict a sizable increase in annual growth (1.9%) from 2023 to 2028
How Do I Determine The Value of My Ambulance Service Company?
The best way to determine the value of your ambulance service company is to work with a reputable business broker. They perform a comprehensive analysis of your financial information and use acquisition multiples. Acquisition multiples, also called rules of thumb, are calculated averages based on recent sales of ambulance service companies. The rule of thumb data includes:
- Ambulance Service Companies sold between 2.02 to 7.94 times the Seller’s Discretionary Earnings (SDE)
- Ambulance Service Companies sold between 0.49 and 0.93 times the annual net sales
- Ambulance Service Companies sold between 1.54 and 15.54 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
The acquisition multiples for ambulance services include a wide range. There is a correlation between the amount earned in net sales and the size of the acquisition multiple. For example, companies with more than $5 million in net sales are toward the higher end of the range (on average), whereas companies with less than $1 million in net sales are toward the lower end. Of course, there are many other factors considered. Your unique advantage within the industry, the quality of your machinery, vehicles, and equipment, the quality of your workforce, and your reason for selling all play a role, among numerous additional considerations.
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What Steps Are Involved in The Sale of an Ambulance Service Company?
At the risk of oversimplifying the sales process, we have broken the process of selling an ambulance service company into five steps. Below is a general description of each sage. Of course, for the most personalized advice, we strongly recommend contacting a business broker who understands the industry and has experience selling companies successfully for fair market value.
As discussed, your business valuation determines fair market value for your ambulance service company based on the review of your financial data, previous sales within the history, and the intrinsic value of your company (i.e. unique, selling proposition). For your business valuation, your business broker will review your federal tax returns (at least three years), profit and loss statements, balance sheets, the value of inventory, equipment list, and lease information.
It helps to prepare all of the documents you will need ahead of time. Notably, this includes your tax returns, profit and loss statements, client information, insurance policies, and internal balance sheets. Your CPA and business broker can assist you with ensuring you have all of the documents you need to complete the due diligence stage quickly (see below).
Marketing (Finding a Buyer)
Your business broker should have numerous connections that allow them to find you, potential buyers. As offers come in, your broker can review them, screen them quickly, and explain the details of each offer. They also offer advise as to which buyer can help you reach your goals the best. A good broker also understands that your goals may go beyond the bottom line.
Due diligence allows the buyer to review the details of your ambulance service company closely. This involves requesting documents such as your tax returns and other financial information. They may periodically ask for clarification about your financial, legal, and operational information. It is vital to prepare so that you can work through this process as quickly as possible. A fast due diligence process minimizes the risk of the buyer backing out of a deal due to a lack of clarity, a change of mind, or unforeseen circumstances.
Last but not least, it is time to close the sale. This involves attaining the final signatures and beginning the company’s transfer to the buyer. Your attorney and broker should help ensure a smooth process while at the closing table. Once the closing process is complete, you can move toward the next chapter of your exit strategy (i.e. start a new business, retirement, etc.)
Should I Hire a Business Broker to Help Sell My Company?
The fact s selling your company on your own without professional help is incredibly difficult. There are many steps with complexities and legalities. Additionally, there is a strong chance that the sale of your business is not kept confidential when you sell without the assistance of a business broker. On the other hand, working with a business broker makes the process simpler. They provide a reliable business valuation and help you sell discretely for fair market value. They are also there to offer consultancy and support every step throughout the sale, from determining your value to ensuring the closing of the sale goes smoothly.
Contact Sigma Mergers and Acquisitions for a Free, No-Obligation Business Valuation
Sigma Mergers and Acquisitions understands how to sell ambulance service companies successfully. We have helped sell more than 600 businesses. If you are interested in a free valuation or would like to discuss your exit strategy, schedule a consultation with us today.
Scot Cockroft is the Owner & President of the #1 ranked Business Brokerage, Business sales and M&A firm in Texas. Scot has been named Named Deal Maker of the Year by Dallas Business Journal.
He is committed to a “different” type of business brokerage firm, one that is NOT about a sales pitch but, rather, results! In short, a business brokerage firm that is committed to performance-based compensation. Scot believes in these principles as well as a candid honesty with clients. His candid style often takes buyers and sellers by surprise, but is often what assures successful connections between the two.
Feel free to reach out!