Clinica del Valle Medical Group, PSC | Professional Services Corp | Valuation Date: December 31, 2025 | Standard: Fair Market Value
AXIS Independent Advisory was retained to provide a calculation of value of 100% of the ownership interests of Clinica del Valle Medical Group, PSC ("the Company"), a multi-physician general medical practice operating in Ponce, Puerto Rico. This engagement was performed under NACVA Professional Standards and AICPA SSVS No. 1 as a Calculation of Value for internal succession planning purposes.
The Analyst applied a market approach using comparable transaction data from DealStats (BVR). The SDE Multiple Method received 70% weighting based on 6 selected comparable transactions (median 2.15x SDE). The Revenue Multiple Method received 30% weighting as a corroborating indicator. Historical financial data for fiscal years 2021 through 2025 was analyzed, with normalizing adjustments applied to reported earnings to reflect the economic benefit available to a single owner-operator.
The sections that follow provide the detailed analyses, data, and rationale supporting this conclusion.
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| Line Item | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1,820,000 | $1,950,000 | $2,080,000 | $2,150,000 | $2,210,000 |
| Cost of Services | $728,000 | $780,000 | $832,000 | $860,000 | $884,000 |
| Gross Profit | $1,092,000 | $1,170,000 | $1,248,000 | $1,290,000 | $1,326,000 |
| Gross Margin | 60.0% | 60.0% | 60.0% | 60.0% | 60.0% |
| Operating Expenses | $765,000 | $810,000 | $852,000 | $885,000 | $910,000 |
| Net Income | $327,000 | $360,000 | $396,000 | $405,000 | $416,000 |
| Adjustment | Amount | Rationale |
|---|---|---|
| Reported Net Income | $416,000 | Per Form 1120-S, FY2025 |
| + Owner/Physician Compensation | $185,000 | W-2 salary + K-1 distributions to principal physician |
| + Depreciation & Amortization | $32,000 | Non-cash. Per Form 4562. |
| + Interest Expense | $8,000 | Equipment financing. Buyer decision. |
| + Personal/Discretionary | $14,000 | Personal vehicle, cell phone, travel per GL detail |
| + Non-Recurring Items | $22,000 | FY2025: one-time EHR system migration costs |
| + Rent Adjustment | $6,000 | Related-party lease below market ($3,500/mo vs. $4,000/mo est.) |
| Normalized SDE | $683,000 |
The normalized SDE of $683,000 for fiscal year 2025 was selected as the representative benefit stream, reflecting the Company's current operating performance and steady revenue growth over the analysis period.
| Approach | Indicated Value | Weight | Weighted Value |
|---|---|---|---|
| SDE Multiple Method (1.68x) | $1,147,440 | 70% | $803,208 |
| Revenue Multiple Method (0.52x) | $1,149,200 | 30% | $344,760 |
| Weighted Enterprise Value | 100% | $1,147,968 |
The SDE Multiple Method received 70% weight based on a robust comparable set of 6 transactions in NAICS 621111 (Offices of Physicians). The selected multiple of 1.68x falls below the median of 1.85x, reflecting the Company's owner-physician dependency, limited management depth, and Puerto Rico-specific geographic risk factors. The Revenue Multiple of 0.52x provides corroborating support.
No discounts for lack of marketability (DLOM) or lack of control (DLOC) were applied because the subject interest represents 100% ownership and the comparable transactions reflect whole-practice sales.
(Rounded to reflect imprecision inherent in the valuation process.)
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