The Return on your Investment
This information is, obviously, commercially sensitive but more information will be disclosed to you, under the terms of a Non-Disclosure Agreement, when you meet with our client during your research and due diligence phase.
The Return on your Investment
This information is, obviously, commercially sensitive but more information will be disclosed to you, under the terms of a Non-Disclosure Agreement, when you meet with our client during your research and due diligence phase.
The detailed investment and the return on it will be site dependent but with our client we are working on the following:
Cost to enter the business:
10% of EBITDA on the existing business ‘Goodwill’
Ongoing Costs to the Site Owner (landlord/facilities management & care consultancy support):
Premises Rent Fixed Amount: 40% of EBITDA (subject to a minimum amount)
After Rental payment EBITDA Profit Share: You get 20%
EBITDA Definition:
Earnings before interest, tax, depreciation and amortization (EBITDA) is a measure of a company’s operating performance. Essentially, it’s a way to evaluate a company’s performance without having to factor in financing decisions, accounting decisions or tax environments.
Example:
- EBITDA: £2,000,000
- Goodwill Fee to buy into running your own care home: £200,000
- Fixed Premises Rental: £800,000
- YOUR PROFIT SHARE (20% of remaining EBITDA): £240,000 (so return on your investment within first year)
The target pay-back period for the initial goodwill payment would be less than two years.
There is also the opportunity to build up goodwill in the business which you would receive when the business is eventually sold on.