Acquisitions Anonymous - #1 for business buying, selling and operating - Is this Med Spa/Urgent Care deal a hard pass?

Episode Date: July 22, 2025

In this episode, the hosts break down an overpriced, confusingly diversified urgent care and med spa hybrid in Orange County, exploring why it's unlikely to trade at the asking price.Business Listing – https://www.bizbuysell.com/Business-Opportunity/urgent-care-for-kids-and-adults-full-service-plus-med-spa-3405-sqft/2323118/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Sponsors:This episode is sponsored by OpenPhone — the modern phone system built for founders and operators. OpenPhone lets you create dedicated business numbers that work right from your existing phone or desktop. You get features like auto-replies, shared inboxes, call recording, integrations with tools like Slack and HubSpot—and best of all, you look way more professional.We use OpenPhone here at Acquisitions Anonymous. It keeps our personal lives separate, our teams in sync, and our deals moving fast.Head to https://www.openphone.com/aapod for more info.Verivend – Simplify your capital calls and LP payments with Verivend’s frictionless, secure platform. No more wires, no more hassle. Learn more at https://www.verivend.comThe hosts dive into a peculiar $8M listing for a hybrid urgent care and med spa based in South Orange County, California. Pulling in $3.5M in gross revenue with $1.5M in seller’s discretionary earnings, the business claims to offer everything from urgent care and COVID testingKey Highlights:- $3.5M revenue, $1.5M SDE, asking $8M (5x+ multiple)- Located in affluent South Orange County, CA- Services range from urgent care to med spa and STD testing- Owner is “very semi-absentee” and willing to stay on- Hosts question valuation, mixed identity, and transaction viabilitySubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Hey, welcome to Acquisition. This is Michael, your co-host today. Heather Anderson and I went through and looked at a deal that was fascinating. It reminded me of being a kid when somebody opened up a restaurant here in San Antonio that served both Chinese food and Tex-Mex food all in one restaurant. Was it good? Was it bad? Well, I'll tie that all together with looking at this current deal, which is located in Heather's neck of the woods down in Orange County. So stay tuned for the episode, see what you think of this deal, and we'll catch you next time. Is this is anonymous? She's anonymous. We don't have 100% years anymore. And thumbs downing on just the plus inventory alone. So many founders and operators

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Heather, just coincidentally, we're dressed the same as we were last episode. It is a coincidence. Were you back from putting in an offer on that ski resort, so. Yes, I went and put in the summer-only ski resort. That was pretty cool. But this one's even more interesting. This title caught my attention. Yeah, when I was going through my list of deals in my pocket,

I was like, oh, this is crazy. That's perfect for being Heather to riff on today. So do you want me to pitch you on it? Please. All right, so it's from Bizby Sell. is an urging care for kids and adults, full service plus medspa, and it's 3,500 square feet in Orange County, California.

Oh. Your stomping grounds. This is my stopping grounds, yes. They're asking $8 million. Cash flow is $1.5 million. That is seller's discretionary earnings. So assume that's their salary included in there. Gross revenue is $3.5 million.

So asking prices, 8, makes $1.5 million, and gross revenue is $3.5 million. They're paying $8,500 a month in rent. So that's just shy of $100,000 a year in rent. And it was established in 2021. The business is in a must-see location in Orange County. Urgent Care is a full-service operating on site. Pharmacy, x-rays, COVID-19 testing,

and more for adults and children in South Orange County. It is also a med spa. Conveniently located in the South O.C. for the beach cities and residents of Dana Point, Monarch Beach, San Juan Cropistrano, San Clemente, San Clemente, Capo Beach, oh my God, and Mission Viejo.

There's like 10 more cities here. A lot of South Orange County, yes. The office features advanced diagnostic techniques including x-rays to ensure patients get the answers they need. Team also offers in-office blood testing, urine testing, and sexually transmitted disease testing and treatments. DOT exams and COVID-19 tests. Also a full-service medical spa in the adjoining suite

all under one roof for 35, 405 square feet. One thing that would be fascinating, and we've never done it as a deal type on here, is all of the random businesses that are associated with the adult industry in Southern California. Oh, yeah. Can you imagine? Yeah, well, like all the performers in those videos, they do, like, sexually transmitted disease testing, like, on a monthly basis. So there's, like, two or three labs that they all trust, and you have to have your certificates and all this kind of stuff. And then there's all kinds of other crazy businesses associated with it. But this part of Southern California is not that, it's not the valley.

That's the valley you're talking about. The San Fernando Valley. This is the Orange County where people are classy. That's not going on. I don't think. Classy and conservative. I don't know. But I don't think that, maybe.

It's conservative as far as SoCal goes. Yeah, true, true. Okay, back to this deal that does not involve the industry. Just made me think of it. The urgent care providers specializing customized treatment plans for acute illnesses like bronchitis and other respiratory infections, urinary tract infections, strep throat, and dehydration. They also provide on-side diagnostics and treatments for colds and flus, allergies, and lacerations, and to satisfy the requirements of employer schools and other organizations, the medical team offers comprehensive visicles, including specialized DOT exams. Then there's a bunch of urgent care here, and I'm not going to read that. The doctor is very semi-absentee.

Okay. The medical spa is an aesthetic weight and loss clinic with a physician-level services. It unveils the cutting-edge medical secrets once reserved for celebrities and world-class athletes through research-based, safe physician-level advancements, and aesthetic, sports, obesity, hair loss, and wellness, medicine with the South Orange County. They specialize in non-surgical, non-avisive, no downtime, hair loss restoration, aesthetic, facial, oh my God, I just can't. My voice is not heard. Yeah, this is too much. They do everything. The doctor owner is willing to stay in a current role, very semi-emptancy, is the clinic. medical director is if needed and in the right fit. The furniture fixtures equipment are a million

dollars that has 14 employees. It has a lease in Orange County that goes through 2031. And there's two adjoining suites that the doctor spent a million dollars to build out with a 10-year lease with two more five-year options. There's absolutely nothing like this practice. And then there's some stuff where the doctor will hang around and train the next person. So, Heather, before I've made it, fun of the lack of grammar and punctuation in this listing. What do they do? What is this business? I feel like it started out as an urgent care that needed something to pivot to because it wasn't quite, you know, the urgent cares kind of got overbuilt and maybe ran into challenges also like with reimbursement rates and things like that. And I think this is like an urgent care that

pivoted to also offering everything else, including med spa services. So, you know, know, every possible kind of medical service they could come up with, their offering, including MedSpot, it seems a little wild. Like, everything is going on in there. But I think it started out as an urgent care that maybe struggled in that category and then became a little bit of everything. Yeah. And the broker here is Seabash Ardalon, who has, man, look at all of these certifications he has. He's a business broker serving Orange County and surrounding areas. You could tell he wrote the listing because the same level of punctuation mistakes are in his, in both listings and his seller profile. And his website is redhotproperties.com. Redhotpropertiesca.com. He looks like a sweet

me. Yeah, look at this. Look at his face. I feel like I've met him. I feel like I have. Hey, everyone. I just want to tell you that this episode is brought to you by Varevend, which is the only platform purpose built for independent sponsors and private market investors who want to move faster and eliminate friction. VareVend is cool because it combines investment management and secure instant payments into one platform. So that means capital calls, deployments, and distributions. They all work like Venmo.

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V-A-V-R-V-V-E-V-N gives you the speed and confidence to execute all in one single platform. So you can check it out and learn more at V-E-V-V-E-V-N-D.com. I mean, I've met a lot of brokers in Orange County where I live, so may have, yes. A lot of times they will specialize in medical, and I don't tend to come across a lot of medical. The types of clients I work with don't usually have a health care background, and so I don't see a lot of it. I see a little.

Obviously, I've done a lot of med spas, but not urgent care. Urgent care, like I said, kind of got tough, kind of became a tough space to be in a few years ago, overbuilt, basically. Did he give us EBITDA? There was a lot said there. Yes, cash flow 1.5, SDE. It looks like the doctor who set this up paid out of pocket for. the buildout and everything like that. And they just basically did SDE as equal to EBITA,

which they should be depreciating the buildout, which they're not. Yes. And unless you're a physician that's going to buy this, you probably have a replacement salary for the seller. So, you know, cash flow is probably a little bit lower than what's stated here at $1.5. You know, lop off a physician's worth of salary, so maybe $250 or more.

So maybe you have a million, $2.50. million three left over, depending on what their other adjustments look like. Yeah. And they want $8 million for that. Yeah, even if you give them credit for that, it's $1.5 million in an asking price of $8 million. Which is too high. Yeah. What is that like?

I couldn't even do the math. That's like five, six times. Like it's rough. Yeah. It's just very expensive. Especially when you've got all these different revenue streams. that are listed here. And no one of them is kind of declared as dominant. You know, it's just they do, they do this, they do that, they do this, they do that. So I, you know, I think that diminishes the

value of the cash flow when it's just a little overly diversified and you as a patient or a client kind of don't know, what do I go here for? You know, what is this place? Well, it tends to be a tough thing, right? People, you know, people would try things like a restaurant and a laundromat together. And they're like, well, wait, you know, like that gets us out of any common category. And there's no buyers who want to own a restaurant and a laundromat. And this is kids going into a clinic where STD testing and med spa services, it just seems a little strange. So it's way overpriced. The listing has a bunch of grammatical errors in it.

And it's in a category that's very difficult to transact because it's not a category. and they don't on the real estate. And it's health care. So you need a buyer, at least if they're going to get debt, the buyer needs to have a health care background or be a physician. Ideally, lenders would like them to be a physician,

but at least if they're not a physician to have some kind of health care background. So yeah, you're in a tough, tough kind of spot here. It seems to me like the best value that they have in addition to the cash flow stream is the location. The fact that they did,

build out. They've got good leases, it sounds like. And South Orange County is a, you know, affluent area. Um, you know, they brag about the location. So if it's a, if it is really in a good strip mall or wherever it is, um, you know, that's probably the value here is can, could someone else come along, maybe another physician, um, you know, and, and maybe do more with that location. Yeah. But it's, why pay that much? You wouldn't pay this price for it. Did he say why the doctor is selling? Doctor owner is willing to stay on a current role,

very semi-absentee as, and then it doesn't say. I like the emphasis, very semi-absentee. Well, it's like, are you semi-absentee? Are you very semi-absentee? Very semi-absentee? Are you, you know. It's a lot there. Yeah.

At least there's not an over-abuse of all caps in this listing. I would say that's the thing that's got going for it. But yeah, Microsoft Word has spell correct. Grammarly is your friend. You know, that's my recommendation for folks who are writing things these days. There's no excuse to have a bunch of grammatical errors

and stuff drives people like us crazy. Yeah, yeah. It's a lot here, too. And I think this needed to kind of land the plane somewhere. Like, what is the primary revenue source? Like, I know they do a lot of things, but tell us a little bit about, you know, those things. Is it 50% urgent care? And then they add it on a med spa, just kind of listing

exhaustively everything that they do. I don't think it's help. It's kind of hurting this listing more than it's helping. Yeah. Well, I mean, I think this is a case of, you know, there's a number of brokers who take listings who take listings that are just never going to transact because they hope they'll be around, you know, when the seller is ready to be reasonable. Or they maybe get lucky and somebody shows up and pays crazy price for it. But, you know, this is one of those things where I think, like, you know, our friend Club Fiore does it well. Like, he doesn't take listings that he doesn't think are going to transact.

I wouldn't. If I was a business broker, I wouldn't want to put the work into deals that clearly aren't going to transact. But I think what you said just a second ago is really helpful for a lot of early stage buyers who are new and they're used to maybe looking at real estate listings and all of a sudden they see these prices that it, and the first thing they say to me is these are all, overpriced, yes, yes. Most everything is listed too high and kind of to your point. Sometimes it's

because brokers are waiting it out to see if the seller will come to a more reasonable valuation at some point. And a lot of them won't, ever. Yeah, that's why this listing's been in my little quiver of listings to talk about on this podcast. And it's been here for six months. Well, urgent care med spa definitely got my attention. I thought we were going to talk about emergency Botox, and that's not what we talked about. I mean, as somebody who needs emergency potox often, I'm cool with it. No, you don't. All right, so where are you on this one?

Thumbs down, tough one, too expensive. It really needs to be another physician in the area and pay a lot less. Yeah. I think this person needs to feel lucky to, you know, get their invested capital out of this, plus maybe a little bit of a return because they've got it set up in a, but it feels like it's 250% too expensive. I don't think it's going to trade here. Yeah, I agree. That's bring two cents. All right, on that note, maybe next week we'll talk about a deal you like.

You got any more worm farms or pizza boats? Somebody actually, it didn't go very far, but somebody actually did have a deal they were working on that was a worm farm, not in the same area, but it was another worm farm. And I got really excited when I saw it. So they're out there The worm farm industry is alive and well. That's the way it should go. All right. Everybody thanks for being here. Sorry we didn't love this one,

but there's always the next deal to look at. So Heather, great job today. Same.