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, the medical corporation system, the medical fee system, and labor management for medical staff. Administrative procedures, including applications for approval of articles of incorporation changes to the competent authorities 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 essential.

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 insights or general questions. You will be asked to provide your real name once we proceed to the stage of detailed discussions 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 on-site staff are not informed until immediately 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 a basic agreement, you can withdraw before the final contract is signed, depending on the terms of the agreement.

Yes, not only medical corporations but also individually owned clinics are eligible. For individually owned practices, an asset transfer scheme is common, while for medical corporations, an equity interest transfer scheme is typical.

The 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 achieved.

We operate on a full success-fee basis, calculated using the Lehman formula (3-5% of the transfer price, decreasing with deal 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 institution certified by the Small and Medium Enterprise Agency, we strictly manage potential conflicts of interest.

It is a tool where you can instantly view an estimated transfer price range by entering information such as medical specialty, annual sales, and ordinary profit into a 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 upgrading facilities, ensuring financial transparency, and securing staff continuity can enhance valuation. Ideally, planned preparations should begin 2-3 years before retirement.

A typical case takes approximately 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 Due Diligence & 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 allocation to be binding.

Management rights are transferred upon completion of payment, registration, and approval by the competent authority. As regulatory approval can take 2-3 months, the previous structure will remain in place for some time after the definitive 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.

For the transfer of equity interests, the tax is 20.315% (15.315% income tax + 5% residential tax) under separate self-assessment taxation. Business transfers or redemption of interests are handled separately, so a tax scheme will be designed with a tax accountant.

The director or clinic head 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, which would ordinarily 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 of 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 revenues of ¥100 million to ¥300 million, transfer prices range from approximately ¥30 million to ¥150 million. Specializations such as diabetes or home healthcare tend to increase valuation.

Ranges from ¥50 million to ¥1 billion depending on annual revenue. EBITDA multiples are high, typically 4-8x. Valuation is influenced by repeat patient rates, social media marketing effectiveness, and the comprehensiveness of laser equipment.

For clinics with annual revenues of ¥50 million to ¥200 million, transfer prices range from ¥15 million to ¥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 integration into the community comprehensive care system. Key valuation points include a track record of home visits, end-of-life care provisions, and physician continuity.

Yes, they are. There are cases where clinics with annual revenues of ¥50 million to ¥100 million have transfer prices ranging from ¥20 million to ¥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 medical industry advisor indispensable.

Yes, it is. Group M&A involving multiple clinics/hospitals 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 establishments 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.

Key areas of focus include finance (financial statements), legal (contracts, litigation), labor (unpaid overtime), and medical practice (appropriateness of medical fee claims, medical incidents). Specific to medical corporations, the composition of members/directors and the status of notifications to the competent authorities are also thoroughly examined.

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.