The Weekly Checkup: Week of May 11 - 15, 2026

Issue #3 | Week of May 11-15, 2026

51 announced transactions this week, down from last week's unsustainably high 62, with Services at 31, Technology at 18, and 6 platform deals. The platform count is a bit softer than last week's 9, but two from this week are worth flagging: Thurston Group's formation of Sensorium Clinical Research (three founding sites, California and Florida) and Purpose Behavioral Health Group's formal launch out of Purpose Healing Center. Platform formation in clinical research site networks and behavioral health continues at a pace that suggests sponsors still see room to run in both categories.

A few things from the volume deserve a mention before the deep-dives. Affordable Care, the dental implant DSO, is being taken over by its lenders (Blackstone and KKR among them) in a restructuring that wipes out equity and reduces debt by roughly 70%. Sanford Health's planned absorption of North Memorial Health in Minneapolis, with a $600 million capital commitment attached, is one of the larger rural-to-urban health system integrations we've seen after something of a slowdown in this type of deal. Omnicare, the CVS-owned LTC pharmacy business, received bankruptcy court approval for its sale to GenieRx Holdings, closing the book on one of the more extended unwinding stories in healthcare. And GMR Solutions priced its IPO at $15 per share this week, slashing the originally expected $22 to $25 range by 36% and raising $478.7 million against an original target of approximately $750 million.

This week's From the Vault is a double feature: the Select Medical and Talkspace fairness opinions. Both were filed with the SEC in recent weeks, both have comp sets worth examining carefully, and both teach something specific about how valuations work in categories that do not fit neatly into standard comp tables.

GMR Solutions priced its IPO at $15.00 per share on May 12, against an initial range of $22.00 to $25.00, raising $478.7 million in gross proceeds. At $15 per share and approximately 227.9 million fully diluted shares outstanding, the implied equity market capitalization at pricing was approximately $3.4 billion.

My take: The updated enterprise value math matters. Last week I estimated the implied EV at the $22 to $25 range at approximately $10 billion, producing an 8.4x EBITDA multiple on $1.19 billion in 2025 adjusted EBITDA. At $15 per share, with $3.4 billion in equity and $5.05 billion in debt, the implied EV drops to approximately $8.45 billion, and the implied EV/EBITDA falls to approximately 7.1x. The EV/Revenue at $15 is approximately 1.47x on $5.74 billion of revenue. The concurrent private placement also changed: the final filing shows $500 million from KKR, Ares, and HPS (not the $350 million I cited last week based on earlier S-1 drafts), all going toward redemption of Series B preferred shares and repayment of the first lien term loan. For anyone valuing ambulance or EMS assets, the corrected post-pricing implied multiples of 7.1x EBITDA and 1.47x revenue are a useful reference point.

Direct lenders including Blackstone and KKR agreed to take control of Affordable Care, a dental implant DSO, through a restructuring that reduces the company's debt burden by approximately 70%. Under the deal, lenders will exchange their positions for a mix of new instruments including a $225 million first-lien second-out term loan, $200 million of payment-in-kind notes, and full equity ownership of the reorganized company. Existing equity and preferred shareholders are expected to be wiped out.

My take: The Affordable Care situation is a useful counterweight to the dental consolidation story we covered at length in Issue #4. That issue focused on the valuation dynamics of dental add-ons and platforms in a still-active but repriced market. This week's news is a reminder that the same consolidation wave that produced premium EBITDA multiples in 2021 and 2022 (Affordable Care was reportedly originally acquired for $2.7 billion at ~17x) also produced capital structures that were underwritten to those multiples, and those structures look very different at current operating levels. Dental implant DSOs specifically are a differentiated segment within dentistry: higher per-case revenue and better margins than general dentistry when utilization is strong, but more discretionary than general care and therefore more vulnerable to patient volume softness. A $1.4 billion private credit structure on a dental implant DSO implies an original EV well above what the current business can support, and the lenders are now solving for that gap.

Sanford Health, the Sioux Falls-based nonprofit and the country's largest rural health system, announced a definitive agreement to absorb Twin Cities-based North Memorial Health. The deal includes a $600 million capital commitment from Sanford to North Memorial over a yet-to-be-specified timeperiod. North Memorial will become a Sanford subsidiary and anchor the system's new Twin Cities care delivery region.

My take: The structure here is worth noting. This is not a purchase in the traditional sense: it is a nonprofit integration with a capital commitment rather than a stated acquisition price. That structure is common in health system M&A where both parties are nonprofit, particularly when the target is a community institution that would face political or regulatory headwinds to a straightforward sale. The $600 million capital commitment is the purchase consideration, but it is spread over time, tied to capital investment rather than working capital, and does not create a clean EV/revenue or EV/EBITDA multiple in the way a cash transaction does, without significant adjustment. What is clear is the strategic logic: Sanford has operated primarily in rural and mid-sized markets, and the Twin Cities represent a meaningful urban beachhead that gives it access to specialist referrals, academic partnerships, and a more diversified payer mix. North Memorial operates two hospitals and a network of primary care and specialty clinics in the northwest Twin Cities suburbs. For anyone valuing community hospital systems in markets adjacent to major metros, the Sanford/North Memorial structure, which has yet to be fully fleshed out publicly, will eventually offer some valuable guidance - but we may have to wait until Sanford releases its FY 2026 audit next spring.

CVS subsidiary Omnicare, the national LTC pharmacy business serving skilled nursing facilities and assisted living communities, received bankruptcy court approval for its sale to GenieRx Holdings, a joint venture between Milrose Capital and Integro Healthcare Services, for $250 million. The sale follows a comprehensive court-supervised process.

My take: Omnicare's arc from CVS acquisition to bankruptcy sale is one of the more instructive case studies in healthcare services deal history: a business that looked strategically essential in 2015 (when CVS paid $12.7 billion, or 15.8x EBITDA) proved operationally fragile under the combination of reimbursement pressure, SNF occupancy declines, labor cost inflation, the COVID-era disruption of its core customer base in addition to prolonged legal liabilities and multi-million-dollar government fraud judgements. The LTC pharmacy model depends on high facility utilization and stable reimbursement from the nursing home sector, and both have been under pressure for several years. GenieRx is now buying the business at a price that represents a tiny fraction of what CVS paid, through a bankruptcy process rather than a negotiated sale, which means the buyer is getting a clean liability structure alongside a customer base and operational infrastructure. For anyone valuing LTC pharmacy businesses or advising SNF and ALF operators on their pharmacy relationships, the Omnicare outcome is a reminder that scale in LTC services creates operational leverage in both directions. The post-bankruptcy GenieRx entity will be worth watching as it tries to stabilize the customer base.

Thurston Group, a healthcare-focused PE firm, announced the formation of Sensorium Clinical Research by simultaneously acquiring Apex Clinical Research, Galiz Research, and Quantum Laboratories, three California and Florida-based clinical research sites with over 75 years of combined experience and 400 completed clinical trials.

My take: Clinical research site networks have been one of the more active sub-sectors in healthcare services PE over the last few years, and the Sensorium formation follows the same playbook as several other recent platforms: identify high-performing independent sites in major trial markets, bring them under a shared infrastructure, and create the scale necessary to attract large pharma sponsors that prefer working with networks over individual sites. The valuation math on site acquisitions is notoriously difficult to pin down because revenue is project-dependent and EBITDA can swing significantly based on active trial count and the mix of therapeutic areas. Cardiovascular research, which all three founding sites conduct, tends to carry higher per-site revenue than primary care or general wellness indications. For site owners considering a sale, the emergence of multiple well-capitalized platform sponsors, including Sensorium, Iterative Health (which acquired three cardiology sites from NextStage this week), and several others in the volume, is creating a competitive buyer environment that should support multiples for well-performing sites.

We tracked 44 additional transactions this week, including notable activity in behavioral health (Little Leaves / LEARN Behavioral, Common Ties / Sweetser), dental (Heartland Dental's four-practice April batch, BRLIT / Standard Dental Labs), diagnostics (MacroGenics manufacturing assets / Bora Pharmaceuticals), and imaging (Lumexa Imaging's four-location expansion including two JV-based acquisitions with Advocate Health and UPMC).

This week's Vault covers two fairness opinions filed with the SEC in the last several weeks. Both involve publicly traded healthcare companies being acquired at multiples that require some unpacking, and both illustrate something specific about how investment bankers construct valuation analyses in categories without clean comps.

Deal value: $3.85 billion EV | EV / Revenue: 0.67x | EV / EBITDA: 7.9x

What the press release said: WCAS, alongside management led by co-founder Robert Ortenzio and CFO Martin Jackson, agreed to acquire Select Medical at $16.50 per share, representing an enterprise value of $3.85 billion (approximately 124 million shares at $16.50, plus $1.8 billion in net debt as of December 31, 2025). EBITDA, which is adjusted for both income attributable to JV partners and income from nonconsolidated subsidiaries, is from the Goldman Sachs fairness opinion that was filed as part of the preliminary proxy statement.

What Select Medical actually is: Before evaluating whether 7.9x EBITDA is appropriate, it helps to understand what is inside the number. Select Medical's FY2025 revenue of $5.45 billion (per the 10-K) spans three distinct businesses, each with its own reimbursement model, margin profile, capital efficiency, and comp set:

Critical illness recovery hospitals (LTACH), which account for approximately $2.48 billion (45%) of revenue across 104 hospitals in 29 states. This segment serves patients recovering from critical illness, with a median length of stay measured in weeks, and is reimbursed primarily by Medicare under the LTACH prospective payment system. The segment's EBITDA margin runs in the low to mid-single digits (approximately 8-9% in recent quarters), and it has been subject to two specific regulatory pressures: the CMS 20% transmittal rule, which limits LTACH discharges from collocated hospitals, and the general tightening of admission criteria that has reduced volumes industry-wide.

Inpatient rehabilitation hospitals (IRF), which account for approximately $1.29 billion (24%) of revenue across 38 hospitals in 14 states. This segment has been the company's growth engine: revenue increased more than 16% year over year through the first three quarters of 2025, occupancy at same-store facilities reached 86% in Q3 2025, and EBITDA margins are materially stronger than the LTACH segment. Its publicly traded IRF peer Encompass Health has traded at 9x to 12x EBITDA in the public markets when you back out income attributable to JV partners, well above where Select Medical is being valued as a whole. We’ve even tracked a number of single facility IRF deals priced in this range.

Outpatient rehabilitation clinics, which account for approximately $1.32 billion (24%) of revenue across 1,917 clinics in 39 states. This segment saw revenue grow modestly through 2025 but experienced EBITDA compression driven by payer mix shift, increased health insurance expense, and some softness in per-visit rates. Scaled national outpatient rehab platforms have historically traded at 12x to 15x EBITDA in private transactions, again, well above the blended multiple at which Select is being taken private.

What the fairness opinion added: Goldman Sachs used a comparable company analysis anchored to publicly traded post-acute providers and a DCF based on management's projections. The fairness opinion uses estimated 2026 revenue of $5.72 billion and adjusted EBITDA of $487 million, figures that differ slightly from the 2025 actuals of $5.45 billion and $493 million. The blended EV/EBITDA of 7.9x is well below where the company's individual segments would likely trade if sold separately. That gap is likely the investment thesis for WCAS. The LTACH segment, which has historically acted as a valuation overhang, generates most of the revenue but a disproportionately small share of EBITDA at its current margin.

Why it matters: The Select Medical take-private is a masterclass in how public market valuation complexity creates opportunity for financial sponsors. A three-segment operator where one segment suppresses the blended multiple trades at a discount. For anyone valuing a post-acute platform, the 7.9x blended multiple on Select Medical is not a ceiling for the category due to the specific complexity of a conglomerate structure. Pure-play IRF assets and outpatient rehab platforms are trading materially higher.

Deal value: $835 million EV | EV / Revenue: 2.85x (est. 2026) | EV / EBITDA: 23.9x (est. 2026)

What the press release said: UHS agreed to acquire Talkspace at $5.25 per share in an all-cash transaction. The deal was a 10% premium to the prior close. Wells Fargo served as Talkspace's financial advisor and issued a fairness opinion filed as part of the definitive proxy statement.

What Talkspace actually is: Talkspace is a virtual behavioral health platform with approximately 6,000 licensed therapists providing therapy, psychiatry, and medication management via video, audio, and asynchronous text messaging. Coverage extends to over 200 million lives through commercial payers, Medicare, Medicare Advantage, and TRICARE. The company generated approximately $228 million in FY2025 revenue, with adjusted EBITDA of approximately $15.8 million for FY2025 and guidance of $30 to $35 million for 2026. The fairness opinion uses estimated 2026 revenue of $293 million and adjusted EBITDA of $35 million.

For context on where Talkspace has been: in January 2021, Talkspace went public via SPAC at an enterprise value of $1.4 billion, or approximately 11x estimated 2021 revenue of $125 million. The company then proceeded to miss essentially every revenue and EBITDA target it published during its time as a public company. By the time UHS made its offer, the stock had spent years trading at a fraction of its SPAC valuation. The $835 million enterprise value represents a significant recovery from where the company was trading prior to the deal announcement, but it is still well below the SPAC-era peak.

What the fairness opinion added: Wells Fargo constructed its fairness opinion using three methodologies: a comparable public company analysis, a comparable transaction analysis, and a discounted cash flow analysis.

On the comparable company side, Wells Fargo used a mix of behavioral health technology and digital health platforms. The selected companies analysis implies a range of enterprise value multiples that anchor on forward revenue rather than EBITDA for most comps, which is the correct approach for a business transitioning from loss to profitability. The implied EV/forward revenue range from the comp set spans a wide band reflecting the heterogeneity of the digital behavioral health category, where businesses range from EBITDA-positive and capital-light to still-cash-burning venture-backed platforms. Our own Telemed database, which includes 29 comparable telemedicine transactions going back to 2013, shows a wide range of revenue multiples: from 1.1x (Aligned Telehealth, in a distressed sale) to 11.2x to 12x in the peak 2021 SPAC environment, with a post-2022 median for profitable or near-profitable platforms clustering around 2.0x to 3.0x forward revenue. The 2.85x forward revenue multiple on Talkspace sits at the high-end of that normalized range for a business of this scale growing at roughly 20% annually.

On the transaction side, the most relevant recent comp is the Eucalyptus acquisition by Hims & Hers for $1.15 billion at 2.56x LTM revenue in February 2026, and Thirty Madison's acquisition by Remedy Meds for north of $500 million at 2.27x LTM revenue in September 2025. The Talkspace multiple of 2.85x forward revenue (or roughly 3.7x LTM revenue using 2025 figures) is a premium to those comps, but Talkspace's behavioral health focus arguably supports a premium: behavioral health demand is structurally stronger than GLP-1-adjacent weight loss telehealth, the payer coverage is more durable, and the integration into UHS's inpatient and outpatient behavioral health network creates a strategic rationale that purely financial buyers cannot replicate.

The DCF range from the fairness opinion implies a weighted average cost of capital in the low double-digits and a terminal growth rate that reflects steady-state behavioral health demand. The spread between the low and high end of the DCF range is wide, as it always is for high-growth businesses with meaningful execution risk in the projection period.

Why it matters: The Talkspace valuation is instructive for anyone working on digital behavioral health transactions. The 23.9x EBITDA multiple on 2026 guidance looks expensive in isolation, but it is not the operative multiple as margins have just recently flipped positive: the operative multiple is the 2.85x forward revenue, and on that basis the deal is roughly in line with recent telemedicine precedents for profitable or near-profitable platforms. The more interesting observation is structural. UHS is not paying for Talkspace as a standalone digital health company. UHS is paying for Talkspace's 6,000-therapist network, its 200 million covered lives relationships, and its ability to serve as the top-of-funnel acquisition and diversion engine for UHS's 350-plus inpatient and outpatient behavioral health facilities. For a health system that already operates the inpatient infrastructure, a virtual behavioral health platform changes the referral economics in both directions: Talkspace captures patients who would not engage with in-person care and routes the most acute cases to UHS facilities.

Scope Research's valuation database has approximately 2,900+ healthcare M&A transactions with disclosed or derived revenue and EBITDA multiples going back to 2010. The underlying source documents, including cost reports, CON filings, bond disclosures, SEC filings, and fairness opinions, are what make those figures reliable.

Location: Ohio | Asking Price: $36.0M | Revenue: $12.8M | EBITDA: $6.45M | EBITDA Margin: 50.4% | Price / Revenue: 2.81x | Price / EBITDA: 5.58x

Multi-location Ohio medical practice specializing in the evaluation and treatment of accident-related injuries, including auto, work, and personal injury cases. $3 million in updated diagnostic equipment included. Exact location undisclosed pending NDA.

My take: The 50.4% EBITDA margin on a multi-location injury medicine practice is unusually strong and the first thing any serious buyer should scrutinize. Injury medicine practices, particularly those with heavy auto and workers' compensation payer mix, are volume-driven businesses where margins reflect the combination of case volume, attorney referral relationships, and the ability to capture ancillary revenue through in-house diagnostics. A $3 million equipment base in a $12.8 million revenue practice suggests the diagnostics contribution is material. The 5.58x EBITDA ask is below where comparable injury medicine platforms have transacted in recent years, and the asking price may actually be conservative if the referral network is durable. Three diligence priorities: first, the composition of payer mix between auto (PIP), workers' comp, and commercial, because each has different reimbursement dynamics and collection timelines (often as long as 6-12 months); second, the source and concentration of attorney referrals, which are usually the primary driver of case volume and are not always transferable on ownership change; and third, the equipment ownership and lease structure, because diagnostic equipment is a significant revenue driver and the revenue attributable to the equipment may change depending on how the buyer structures the transaction. Ohio's physician practice regulations apply here, but injury medicine practices with non-physician owners have been structured successfully under MSO arrangements. Verify the legal structure before closing.

Location: West Florida | Asking Price: $4.0M | Revenue: $3.5M | Cash Flow: $500K | CF Margin: 14.3% | Price / Revenue: 1.14x | Price / Cash Flow: 8.0x

Multi-site urgent care platform in West Florida. Three operating locations, all walk-in with extended hours. Diversified payer mix including commercial, self-pay, Medicare, and workers' compensation. On-site CLIA-certified labs and X-ray. Experienced clinical and administrative leadership team.

My take: The 14.3% cash flow margin is below where urgent care should be operating, and that is the most important diagnostic for this listing. Well-run urgent care platforms in competitive markets generate 20-30% EBITDA margins at steady state; 14% on a three-location Florida platform suggests either revenue that is still ramping, a cost structure that has not been optimized post-build-out, or a competitive environment that is compressing per-visit economics. West Florida is a heavily penetrated urgent care market, and competition from national players can be fierce in many markets. The 8.0x cash flow ask is above where comparable three-location urgent care platforms usually trade. A strategic buyer (a regional health system, a physician group, or an urgent care platform looking for market entry) could justify the 8.0x on the basis of the existing patient relationships and payer contracting. A financial buyer underwriting to the current margin will struggle to clear it. Florida's AHCA licensing process applies to any change of ownership involving licensed healthcare facilities, and the timeline should be modeled into deal structure.

Location: Fayette County, GA | Asking Price: $7.35M | Revenue: $4.77M | EBITDA: $1.55M | EBITDA Margin: 32.4% | Price / Revenue: 1.54x | Price / EBITDA: 4.75x

CARF-accredited behavioral health organization founded in 2004 (New Heights Behavioral Consultants). Provides integrated outpatient mental health and substance use disorder treatment across eight Metro Atlanta counties. More than 650 clients served weekly. Contracted revenue streams from school-based programs and DBHDD.

My take: The 4.75x EBITDA ask on a CARF-accredited behavioral health platform with 650+ weekly clients and diversified contracted revenue is at or below the lower end of what institutional behavioral health buyers have been paying for similar businesses. The DBHDD (Georgia Department of Behavioral Health and Developmental Disabilities) contract revenue is a meaningful differentiator: state DBHDD contracts are relatively stable, provide cost-based or rate-based reimbursement, and create barriers to competition that purely commercial behavioral health practices lack. The school-based program revenue is also notable, as school-based behavioral health has expanded significantly post-COVID and tends to carry favorable margins relative to outpatient clinic visits. The diligence priorities are standard for a community behavioral health platform: payer mix detail between DBHDD, commercial insurance, Medicaid, and self-pay; staff credentialing and licensure, particularly for clinical supervisors whose departure could affect program certifications; and the non-compete radius for the founding operators, who have 22 years of community relationships that drive referrals from courts, schools, and churches. For a strategic behavioral health buyer with Georgia operations, this may be underpriced. For a first-time buyer, the DBHDD contracting process and CARF accreditation maintenance are meaningful operational requirements that need to be understood before closing.

Location: Las Vegas, NV (and bordering state) | Asking Price: $3.95M | Revenue: $3.49M | Cash Flow (SDE): $1.63M | CF Margin: 46.8% | Price / Revenue: 1.13x | Price / Cash Flow: 2.42x

Long-established neurology practice with three locations (one Nevada, two in a bordering state). Services include general neurology, sleep medicine, neuropathy, dizziness, epilepsy, and headache. Seller is a neurologist; a replacement neurologist salary would reduce profitability significantly. Seller open to selling Nevada and bordering-state locations separately.

My take: The 2.42x SDE multiple looks attractive, but the neurologist compensation adjustment is the operative number: after replacing the selling physician at market compensation, the effective cash flow drops - and it’s up you to determine how much. Another interesting question for a buyer is whether the sleep lab component can be extracted and valued separately. Sleep lab revenue (polysomnography, home sleep testing, CPAP titration) generates meaningfully different economics and comp multiples than general neurology, and a buyer who can build sleep lab volume has an upside that is not visible in the current margin. Nevada does not have a CON law for physician practices or sleep labs, which simplifies the regulatory path. The ability to split the Nevada and bordering-state locations is a useful structural option for a buyer who wants the sleep asset without geographic complexity, though that split would require a careful allocation of revenue and staff between the two components.

Location: Mid-Atlantic / Northeast (undisclosed) | Asking Price: $22.0M | Revenue: $13.0M (projected 2025) | EBITDA: $2.44M (run rate) | EBITDA Margin: 18.8% | Price / Revenue: 1.69x | Price / EBITDA: 9.02x

Specialty medical billing and RCM company with compound annual revenue growth of approximately 45% from 2022 to 2025. First-pass claims rate of 98.3%, net collection rate of 98.6%, bad debt rate of 1.1%. Staff almost entirely onshore. Owners open to staying post-close.

My take: The growth story is very, very nice: $5.7 million in 2022 to a projected $13 million in 2025 is exceptional performance in a market where most RCM companies grow in the single digits annually. That growth rate is also the central underwriting question. Is the growth structural (a defensible specialty niche, a differentiated technology stack, or a client concentration model that produces sticky revenue) or is it episodic (a handful of large client wins that could reverse as quickly as they appeared)? The 9.02x EBITDA ask is high relative to the current earnings level but becomes more reasonable if a buyer can underwrite continued 20%+ growth. The 98.3% first-pass claim rate and 98.6% net collection rate are genuinely strong operating metrics that are difficult to fake in diligence: they either show up in the client bank statements or they don't. The undisclosed specialty is the most important piece of information missing from the teaser. Specialty medical billing multiples vary significantly: billing companies serving anesthesiology, radiology, and emergency medicine trade at different multiples and carry different regulatory risk than those serving primary care, physical therapy, or behavioral health. A buyer should require full client and specialty disclosure in the NDA package before engaging on price.

That's it for Issue #6.

See you next Tuesday.

Will Hamilton, CVA
Founder, Scope Research and HealthFMV

The Weekly Checkup is published every Tuesday morning. Written for general informational purposes. Services through Scope Research or HealthFMV require a separate agreement.