- 52 -
$17,670,040.10 Another example shows that House Call, Inc., sold
at a price 1.08 times its total assets, a ratio close to the 1.10
that Hahn has ascribed to the Sta-Home tax-exempt entities.
House Call, Inc.’s sale price, however, also indicates that it
sold at a multiple of .74 times revenues, ranking second of the
13 comparables. If the Sta-Home tax-exempt entities were sold at
this ratio, the indicated sales price would be approximately $33
million. Moreover, in an article published in the spring of
1997, Hahn indicated that for the prior 2 years, a standard
market benchmark for valuing traditional visiting nursing
agencies, such as the Sta-Home tax-exempt entities, was a price-
to-revenue multiple of .55. Hahn & Spieler, “Valuation of Home
Health Care Companies,” Intrinsic Value (Spring 1997). We fail
to understand why the Sta-Home tax-exempt entities had a much
lower multiple of .26. We recognize that the Sta-Home tax-exempt
entities operated at a loss for the prior year, but so did 8 of
the 13 comparable companies. We further recognize that the
Sta-Home tax-exempt entities’ equity capital was a negative
amount, but so was that of 7 of the 13 comparable companies.
These characteristics reflect the accepted conclusion that exempt
entities operating under the Medicare reimbursement system stood
10 The book value used for the Sta-Home tax-exempt entities’
total asset value excludes any value for intangible assets. It
is unclear whether Clausen’s book value for total assets includes
intangibles.
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