Fairness opinions › Bankers
Allen: healthcare fairness opinions
6 opinions in healthcare transactions, 2015-2019 — 4 to the target board, 2 to the acquirer. Each links to the filing and the full summary of analyses.
Opinions
6
2015-2019
Typical DCF discount rate
7.7%–8.9%
median of low / high · n=6
Terminal method
perpetuity growth 4 · exit multiple 2
Median disclosed fee
$37.5M
n=2
Deals
| Announced | Target | Acquirer | Segment | EV | EV/EBITDA | EV/Rev | DCF rate |
|---|---|---|---|---|---|---|---|
| 2019-03-27 | WellCare Health Plans | Centene | Managed Care | $17B | 14.5x | 0.62x | 7.0%–8.3% |
| 2017-12-03 | Aetna | CVS Health | Managed Care | $71B | 12.1x | 1.18x | 7.0%–8.5% |
| 2017-12-03 | CVS Health | Aetna | Pharmacy / Infusion | $90B | 7.2x | 0.49x | 7.0%–8.5% |
| 2017-08-29 | Advisory Board Healthcare | Optum | Outsourced Services | $1.3B | 10.3x | 2.36x | 7.5%–8.8% |
| 2015-07-02 | Health Net | Centene | Managed Care | $6.0B | 9.3x | 0.37x | 8.0%–9.0% |
| 2015-06-04 | Bio-Reference Laboratories | Opko Health | Diagnostics / Life Sciences | $1.5B | 12.1x | 1.59x | 8.5%–10.5% |
Segments: Managed Care (3) · Pharmacy / Infusion (1) · Outsourced Services (1) · Diagnostics / Life Sciences (1)
Discount rates Allen has used
| Deal | Discount rate | Terminal | Growth / exit | Implied per share |
|---|---|---|---|---|
| WellCare Health Plans 2019 | 8.3%–9.8% | perpetuity growth | 2.0%–3.0% | $215.00–$326.00 |
| Aetna 2017 | 7.0%–8.5% | perpetuity growth | 2.0%–3.0% | — |
| CVS Health 2017 | 7.0%–8.5% | perpetuity growth | 2.0%–3.0% | — |
| Advisory Board Healthcare 2017 | 7.5%–8.8% | exit multiple | 8.0x–11.0x | $45.30–$63.39 |
| Health Net 2015 | 8.0%–9.0% | perpetuity growth | 3.8%–4.3% | $62.52–$89.94 |
| Bio-Reference Laboratories 2015 | 8.5%–10.5% | exit multiple | 7.0x–8.0x | — |
Peer companies Allen selects most often
Anthem, Inc. (2) · Centene Corporation (2) · Cigna Corporation (2) · Humana Inc. (2) · Molina Healthcare, Inc. (2) · UnitedHealth Group Incorporated (2) · WellCare Health Plans, Inc. (2)
Precedent transactions Allen cites most often
Coventry Health Care, Inc. / Aetna Inc. (2) · HealthSpring Inc. / Cigna Corporation (2)
3,000+ healthcare deal-level valuation multiples
The Valuation database includes financial details for more than 3,000 healthcare M&A transactions, private and public, with deal-level multiples, categorized by segment, type, and year.