Description

This company, founded in 1988, is a developer of a recurring revenue business model medical billing software used by the behavioral health industry.

This business is truly turn-key with strong, stable, long-term staff in place. After the first two months of on-boarding a new client there is a very low level of ongoing staff time required beyond customization (which is billed for), and software updates. The software lease fees become a source of monthly recurring revenue.

This software is used in client clinics in 30 states and includes some larger healthcare systems that appreciate its enterprise-level functionality. There's a very low level of client churn (less than 7% from 2010-2014), and it has attracted, on average, nine net new clients per year.

The company has experienced very high margins (EBITDA margin in 2015 was 58.8%), and produces high annual revenue per employee of $411,775, as well as $242,239 in EBITDA per employee.

Growth and expansion opportunities include: 1, initiate an active sales and marketing campaign - virtually no marketing or advertising has been done in the past; 2, increase prices - this business' monthly pricing is similar to some competitors maintenance charges AFTER buying software; 3, continued revenue growth will lead to higher margins - this business can grow by about 25% without adding additional staff (its primary expense), so most of that revenue will drop to the bottom line; and 4, offer an out-sourced billing service.

Posted Oct 31, 2015

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