Dr. Vince Leone explains how clinic valuations multiply with scale. A single clinic worth $1 million might be valued at $12 million once rolled into a 155-clinic group, because larger aggregations command 12-14x earnings versus 1-2x for small practices. That on-paper wealth lets owners borrow more to buy additional assets.
I think this is the biggest mind-blowing question I think that somebody can ask. So I was saying earlier about multiples. I know what a multiple is at 1 and 2. The multiple, once you get into clinics 10, 15, are 4 times, 5 times. You get up into 20, 30, 40 clinics, you're looking at 10x. Like 10x. I know exactly what the multiples are at 155 clinics, and it's 12 to 14x. So you imagine that you go buy it, you go spend $1 million on a clinic, that clinic the next day is worth $12 million. It's a stupid number, but it's an on-paper number and it's a, it's a value number, right? It's not, you know, you're not getting real money for that, but that's a value that you can then add to your net worth, essentially. And what does that mean for borrowing? It means everything, because now you can leverage the, the basis of what your value is to go get the next thing that you need to get.
