Mary Washington Pediatrics

5 Pages Posted: 31 Mar 2019

See all articles by Michael J. Schill

Michael J. Schill

University of Virginia - Darden School of Business

Abstract

This case follows the 2017 acquisition valuation of Mary Washington Pediatrics in Northern Virginia by two pediatricians, Natalia Juarez and Kirsten Atwood. The case provides a simple context for discussing approaches for enterprise valuation, including discounted cash flow (DCF) and transaction multiples methods. Students are encouraged to critique a financial forecast for the practice using the current performance of the target company and other comparables. The case has been used in a course specific to medical professionals but could be used by any group seeking an introduction to valuation mechanics

Excerpt

UVA-F-1877

Mar. 27, 2019

Mary Washington Pediatrics

Dr. Natalia Juarez put down her phone and took a deep breath. It was May 2017, and she had just finished a call with longtime friend and fellow pediatrician Kirsten Atwood. The two friends had talked about partnering for years. Now they were on the verge of doing it.

Juarez and Atwood had visited Mary Washington Pediatrics last week and met with the three physicians who owned it. The visit had gone well and both had come away feeling that this was the right practice for them. Still, the decision to buy it not only entailed a lot of money but also meant a relocation for both Atwood and Juarez. Since they were still pretty early in their careers, flexibility was important to them. As such, they were determined not to overpay for the practice, as they expected they might sell it in five to seven years.

Juarez had promised to get back to Atwood by the end of the day with her recommendation for a bidding strategy. The strategy entailed determining both their opening bid and their walkaway price. As this was the practice that best met their objectives, their plan was to bid aggressively. With a bid in by tomorrow, it was possible that by the end of the week they would both be the proud owners of a pediatric practice in Northern Virginia. Although the thought was arresting, she fired up her laptop and got to work.

. . .

Keywords: firm valuation, discounted cash flow analysis, multiples, debt policy, health care management

Suggested Citation

Schill, Michael J., Mary Washington Pediatrics. Darden Case No. UVA-F-1877. Available at SSRN: https://ssrn.com/abstract=3362635

Michael J. Schill (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4071 (Phone)
434-243-7676 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/schill.htm

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