Medical M&A and Business Succession: Frequently Asked Questions (FAQ)

Medical M&A involves complex, industry-specific issues such as the Medical Care Act, medical corporation systems, remuneration systems, and labor management of medical staff. Administrative procedures such as applications for articles of incorporation amendments to the governing authority and notifications of clinic opening/changes to the public health center are also required, making the support of advisors specializing in the medical industry indispensable.

Almost all medical institutions are eligible, including clinics without beds, clinics with beds, hospitals, medical corporations, dental clinics, and dispensing pharmacies. Consultations are accepted regardless of specialty, size, or region.

Yes, initial consultations are accepted anonymously. We welcome inquiries about market trends or general questions. You will be required to provide your real name from the stage of detailed discussion after signing an NDA.

We will execute an NDA and impose strict confidentiality obligations on potential acquirers. Information disclosure will be limited to the minimum necessary personnel, and operations will be managed so that the staff are not informed until immediately before the transfer.

Yes, it is possible. Many cases exist where acquirers can be found for clinics in the red or facing financial difficulties, based on other value factors such as location, specialty, staff, and licenses. Early consultation is key.

You can freely withdraw from negotiations before signing a Letter of Intent (LOI). Even after signing the LOI, withdrawal may be possible before the final contract signing, depending on the contract terms.

Yes, not only medical corporations but also individually-owned clinics are eligible. For individual ownership, a business transfer scheme is common, while for medical corporations, an equity transfer scheme is typical.

The transfer price is calculated based on three elements: net asset value (market value of medical equipment and facilities), goodwill (EBITDA x multiplier of 2-5 times), and intrinsic value (location, patient base, staff). The multiplier varies depending on the specialty and management status.

M&A Medical offers initial consultations and preliminary appraisals of transfer market prices completely free of charge. All services, including detailed interviews and introduction of potential buyers, are provided at no cost until the deal is finalized.

We operate on a full success-fee basis, calculated using the Lehman formula (3-5% of the transfer price, decreasing with transaction size). We do not charge any upfront fees, monthly fees, or interim payments. No fees are incurred unless the transaction is successfully closed.

Yes, it is common practice for both the selling and acquiring parties to pay success fees (dual agency). As an M&A support institution certified by the Small and Medium Enterprise Agency, we strictly manage potential conflicts of interest.

It's a tool where you input information such as medical specialty, annual revenue, and ordinary profit into an online form, and an estimated transfer price range is instantly displayed. It can be used anonymously and requires no registration.

Improving profitability over the past three years, reducing reliance on the clinic director, maintaining and updating facilities, ensuring financial transparency, and securing staff continuity can enhance the valuation. Ideally, planning should begin 2-3 years before retirement.

A standard case typically takes 6 months to 1 year. The process involves: ① Free Consultation (30-60 min) ② NDA & Quick Valuation (1-2 weeks) ③ Matching (1-3 months) ④ Interview & LOI (1-2 months) ⑤ DD & SPA (2-3 months) ⑥ Closing & PMI (1-2 months).

We meticulously examine four areas: Finance (accuracy of financial statements, off-balance sheet liabilities), Legal (contracts, permits/licenses, litigation), Labor (employment contracts, unpaid overtime, social insurance), and Medical Practice (appropriateness of medical fee claims, medical incidents).

While key terms (transfer price, scheme) are generally not legally binding, it is common for clauses such as exclusive negotiation rights, confidentiality, and cost burden to be legally binding.

Management rights are transferred upon completion of payment, registration, and approval by the competent authority. Since competent authority approval can take 2-3 months, the previous structure will continue for some time after the final agreement.

No, a transition period of 3-12 months is common. In many cases, the director remains as an advisor or part-time board member to assist with the handover to patients, business partners, and staff.

It involves continuous support for stabilizing human resources, procurement, and operations after closing. M&A Medical provides support through in-group services such as medical supplies sales, talent acquisition, and management consulting.

In the case of a transfer of equity interest, it is subject to separate self-assessment taxation at 20.315% (15.315% income tax + 5% residential tax). Asset transfers or redemption of equity are handled separately, so a tax scheme will be designed with a tax accountant.

The director-general or clinic director of a medical corporation can receive a retirement allowance upon retirement. Retirement income is taxed at 1/2 and benefits from retirement income deductions, allowing for optimized tax burden when combined with capital gains.

It is a system that allows for the avoidance of gift tax, which would normally be levied when transitioning a medical corporation with equity to one without equity. Certification requires meeting 10 operational requirements and a transition plan within 3 years, making continuous operational management by a tax accountant crucial.

Yes, it is possible. Approval from the competent authority is required, and tax treatment differs for qualified and non-qualified mergers. It is utilized in strategic reorganizations to integrate multiple clinics.

Capital gains from the transfer of a sole proprietorship are subject to comprehensive taxation, with a maximum rate of 55%. In many cases, it is more tax-advantageous to incorporate as a medical corporation beforehand and then sell by transferring equity interests (requires judgment of a tax accountant).

For medical corporations with equity, the valuation of equity interests is subject to inheritance tax and tends to be high. By converting these assets into cash through a third-party succession M&A during one's lifetime, it may be possible to reduce the inheritance tax burden.

For clinics with annual sales of ¥100-300 million, the transfer price is approximately ¥30-150 million. Specializations such as diabetes or home healthcare tend to increase the valuation.

Ranges from ¥50 million to ¥1 billion depending on annual sales. EBITDA multiples are high, typically 4-8x, with repeat customer rates, social media marketing strength, and the completeness of laser equipment significantly influencing the valuation.

For clinics with annual sales of ¥50-200 million, the transfer price is ¥15-80 million. The valuation significantly increases if the ratio of self-pay treatments, such as implants and orthodontics, exceeds 30%.

Yes, home healthcare is a highly valued sector due to its participation in the community-based integrated care system. Key evaluation points include a track record of home visits, end-of-life care arrangements, and physician continuity.

Yes, they are. There are cases where clinics with annual sales of ¥50-100 million have transfer prices ranging from ¥20-80 million. Suitable acquirers (e.g., physicians aspiring to independent practice) can be found.

Yes, it is. Comprehensive consideration involving the reorganization of bed functions, alignment with regional medical care plans, and changes in management is required, making a specialized advisor in the medical industry indispensable.

Yes, it is. Group M&A involving multiple clinics and related businesses (e.g., nursing care, pharmacies) requires complex scheme design. M&A Medical has a proven track record with group transactions.

Yes, you can register as a prospective acquirer, whether you are a medical corporation, a business entity, or an individual physician. Please contact us via the inquiry form.

M&A acquisition offers the advantage of commencing operations in about six months, compared to new establishment which can take over a year for site selection, permits, and recruitment. The ability to inherit an existing patient base, staff, and track record is also a significant difference.

We focus on financial aspects (financial statements), legal matters (contracts, litigation), labor issues (unpaid overtime), and medical practice (appropriateness of medical fee claims, medical incidents). Specific to medical corporations, we also thoroughly examine the composition of members and directors, and the status of notifications to the competent authorities.

Loans from institutions such as Japan Finance Corporation, medical-specialized financial institutions, and regional banks are common. M&A Medical also provides financing support through partnerships with affiliated financial institutions.