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

Medical M&A involves complex issues unique to the healthcare industry, such as the Medical Care Act, medical corporation system, medical fee system, and labor management for medical staff. Administrative procedures, including applications for approval of articles of incorporation changes to the competent authority and notifications of changes in clinic establishment to public health centers, are also required. Therefore, the guidance of an advisor specializing in the medical industry is indispensable.

Almost all medical institutions are eligible, including unbedded clinics, bedded clinics, hospitals, medical corporations, dental clinics, and dispensing pharmacies. We accept consultations regardless of medical specialty, scale, or region.

Yes, initial consultations are accepted anonymously. We welcome inquiries even for market trend checks or vague questions. You will be asked to provide your real name once we proceed to the stage of discussing details after an NDA has been signed.

We will sign an NDA and impose strict confidentiality obligations on potential acquirers. Information disclosure will be limited to a minimum number of relevant parties, and operations will be managed to ensure that the on-site staff remains unaware until just before the transfer is executed.

Yes, it is possible. Even for medical institutions operating at a loss or facing management difficulties, there are many cases where potential acquirers are found due to other value factors such as location, medical specialty, staff, and licenses/permits. Early consultation is key.

You are free to discontinue negotiations before signing a Letter of Intent (LOI). Even after an LOI is signed, you can withdraw before the final contract is executed, depending on the terms of the agreement.

Yes, both medical corporations and individually owned clinics are eligible. For individually owned clinics, a business transfer scheme is common, while for medical corporations, an equity interest transfer scheme is typical.

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

At M&A Medical, initial consultations and preliminary valuations of transfer market value are completely free. No fees are incurred for detailed interviews or introductions to potential candidates until a successful transaction is completed.

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 deal is successfully closed.

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

It is a tool that instantly displays an estimated transfer price range when you enter information such as medical specialty, annual sales, and ordinary profit into the form on our website. It can be used anonymously and without 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 will 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 the main terms (transfer price, scheme) are generally not legally binding, it is common for clauses such as exclusive negotiation rights, confidentiality, and cost allocation to be 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 old system 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 support the handover to patients, business partners, and staff.

It is the continuous support for stabilizing human resources, procurement, and operations after closing. M&A Medical provides support through in-group services such as medical supply sales, human resource placement, and management consulting.

In the case of equity transfer, it is subject to separate self-assessment taxation at 20.315% (15.315% income tax + 5% residential tax). Business transfers and equity redemptions are handled separately, so we design the tax scheme with a tax accountant.

The director-general and 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.

This system allows for the avoidance of gift tax that 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. This 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%. It is often more tax-advantageous to incorporate as a medical corporation beforehand and then sell by transferring equity interests (requires judgment by a tax accountant).

For medical corporations with equity, the valuation of equity interests is subject to inheritance tax and tends to be high. Converting these assets into cash through a third-party succession M&A during one's lifetime may 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. With a high EBITDA multiple of 4-8x, valuation is influenced by repeat customer rates, SNS marketing effectiveness, and the completeness of laser equipment.

For clinics with annual sales of ¥50-200 million, the transfer price is approximately ¥15-80 million. 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 eligible. 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 possible. Complex considerations involving the reorganization of bed functions, alignment with regional medical care visions, and changes in management are required, making a specialized medical industry advisor indispensable.

Yes, it is possible. 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 as a medical corporation, business entity, or individual physician. Please contact us via the inquiry form.

M&A acquisition offers the advantage of starting medical practice in about six months, compared to over a year for new establishments involving land search, 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/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 funding support through partnerships with financial institutions.