Sale of Stake in Clinics: How Valuation Determines the Percentages

The Importance of Valuation in the Sale of a Stake in Clinics

The sale of stakes in medical and dental clinics has become an increasingly common strategy for raising investments and expanding businesses. However, determining the sale percentages requires a careful analysis of the clinic's valuation, ensuring that the negotiation is fair for both existing partners and new investors.

In this article, we explain how valuation influences the definition of sale percentages, the main methods used to calculate a clinic's value, and the best practices to conduct this process safely and transparently.

The Role of Valuation in Defining Sale Percentages

Valuation, or the assessment of a company's value, is the primary criterion used to determine the price of the stake being sold. It takes into account various factors such as revenue, profitability, the clinic’s assets, its market reputation, and growth potential.

For example, if a clinic is valued at R$ 10 million and a partner wishes to sell 30% of his stake, the sale price should reflect that percentage of the valuation. However, the negotiation may involve adjustments depending on market demand, the clinic's attractiveness, and the terms of the agreement.

Furthermore, it is essential that the valuation is well-founded and transparent, avoiding disputes among the parties involved and ensuring that the assigned value is realistic and in line with the health market.

Valuation Methods for Medical and Dental Clinics

There are different methods to calculate a clinic’s value, with the most commonly used ones being:

Discounted Cash Flow (DCF): This method estimates the present value of the clinic's future cash flows, discounted at a rate that reflects the business risk. It is ideal for clinics with a history of predictable revenue.
Market Multiples: This involves comparing the clinic to other similarly sized clinics that have been sold recently, using indicators such as EBITDA (earnings before interest, taxes, depreciation, and amortization).
Book Value: This method is based on the clinic's physical and intangible assets, such as equipment, real estate, brand, and patient base.

Each method has its particularities, and the most appropriate choice depends on the clinic's specific circumstances and the objectives of the negotiation.

How to Structure the Sale of a Stake Strategically

When selling a stake in a clinic, several key points must be considered to ensure a transparent and beneficial process:

Define the Sale Percentage: Based on the valuation, clearly establish the portion of the company to be transferred and the rights that accompany this stake.
Draft a Detailed Contract: Include clauses regarding governance, profit sharing, the responsibilities of the new partners, and exit rules.
Evaluate the Investors’ Profiles: Not every investor is suitable for the clinic. Seeking strategic partners who add value to the business may be more beneficial than merely raising capital.
Plan for the Dilution of Current Partners: The entry of a new investor can impact management and profit distribution, so it is essential to plan how this transition will be handled.

These practices help avoid future conflicts and ensure that the sale of the stake strengthens the clinic rather than causing instability.

Practical Examples of Stake Negotiation

To illustrate the importance of valuation in the sale of a stake, let’s consider two common scenarios:

Sale of a Minority Stake (Example of 20%):A clinic valued at R$ 5 million wishes to sell 20% to an investor. The reference value for this negotiation would be R$ 1 million (20% of R$ 5 million). Depending on the clinic's attractiveness, the investor may agree to pay a higher amount or negotiate a discount.
Sale of a Majority Stake (Example of 60%):A clinic valued at R$ 8 million decides to sell 60% of its operation to a group of investors. The base value would be R$ 4.8 million. To maintain balanced management, the contract may include clauses that preserve a certain level of autonomy for the founding partners in decision-making.

These examples demonstrate how valuation analysis directly impacts the percentages and values in negotiations.

Conclusion

The sale of stakes in medical and dental clinics is an excellent opportunity for growth and capital raising, but it requires a well-structured valuation to ensure a fair and secure negotiation.

By using precise valuation methods, strategically planning the entry of new investors, and drafting detailed contracts, managers can maximize the clinic’s value and strengthen its position in the health market.

Whether selling a minority or majority stake, the success of the transaction depends on transparency, careful planning, and a meticulous analysis of every business detail.