The Deal

Martis Capital is buying health communications agency Deerfield Group from Edgewater Partners for up to $280M. The multiple: 12-14x on EBITDA north of $20M. Axios reported the terms on June 25, 2026.

Most agency owners exit somewhere between 3x and 6x. Deerfield priced at double or triple that. The question worth asking is not "can I get 12x." It is "what did Deerfield build that made 12x possible."

Why Health Comms Gets a Premium Multiple

EBITDA multiples are assigned because of what the category structurally protects against. Health comms agencies working with pharma and medtech clients carry three things buyers pay up for.

First, revenue durability. Pharma marketing budgets survive recessions because drug launches run on FDA timelines, not ad-budget cycles. Second, regulatory moat. MLR review processes and compliance documentation create switching costs that keep clients locked in for years. Third, embedded expertise. You cannot hire a health comms strategist off a job board in six weeks.

Compare that to a general creative shop with a client roster that turns over every 18 months. Same revenue, same headcount, half the multiple.

The Pattern Across Recent Agency Deals

WME sold 160over90 to Publicis for $500M. That is a 2.5x return over roughly seven years. Miroma acquired a majority stake in Ad Results Media from Shamrock Capital, pushing annual media investment past $750M. The IBBA Q1 2026 data shows 83% of deals over $5M get three or more competitive offers.

Buyers want scaled, specialized operations with predictable spend, not project-based shops chasing the next pitch.

The ATLAS Model: What Buyers Actually Diligence

I built the ATLAS Model after watching too many agency owners get their valuation cut in half during diligence. ATLAS stands for Attribution, Team dependency, Legal cleanliness, Account concentration, and Systems documentation.

Attribution means you can show which channel produced which dollar of revenue with data. Team dependency means the business runs without you for 30 days, tested. Legal cleanliness means contracts are current and IP is assigned. Account concentration means no single client exceeds roughly 20% of revenue. Systems documentation means your processes live in written SOPs.

A $20M+ EBITDA health comms agency does not survive institutional-grade diligence without scoring high across all five. That is what 12-14x buys. It buys certainty.

A Story From the Field

I worked with an agency owner convinced his shop was a 6x business. Revenue was strong. Growth was real. Then we ran the ATLAS audit. His top two clients were 61% of revenue. His entire paid media function ran through one contractor with no documentation. His client contracts had no assignment clause.

The first offer came in at 3.2x with an earn-out pushing 60% of the payout three years out. We spent five months fixing the concentration and the contracts. Second round: 5.1x, with 70% at close. Same business. Same revenue. Almost double the multiple.

Why Exits Are Getting Slower

PE exits across categories are getting slower and structurally more complex. Earn-outs, rollover equity, and deferred consideration show up in a larger share of deals, because buyers are restructuring how they pay.

Deerfield's $280M is described as "up to" that amount, which almost always signals an earn-out component tied to performance milestones. Ask your advisor to model the cash-at-close scenario and the full-earn-out scenario separately.

The Owner's Exit Engine: Building Backward From the Multiple

Most agency owners build first and think about exits later. The Owner's Exit Engine works in reverse: pick the multiple you want, identify what it requires, build the business to satisfy those requirements starting today.

Step one: diagnose your current ceiling honestly with the ATLAS audit. Step two: fix concentration risk first, because it is the single item most likely to cut a multiple in half. Step three: document systems so the business survives a 30-day founder absence test. Step four: clean legal and financial records two years before you plan to sell.

What This Means If You Are Not in Health Comms

Take the five ATLAS categories and score your own agency 1-10 for each one. If you score low on Account concentration, you already know your ceiling. If you score low on Team dependency, that alone can cost a full multiple point.

The categories where health comms wins by default, Attribution and Legal cleanliness, are categories every agency owner can fix without a regulatory tailwind. Attribution is a reporting discipline. Legal cleanliness is a law firm engagement and six weeks of contract cleanup.

Doctrine Connection: Verification beats optimism

Deerfield Group did not get 12-14x because someone believed in the story. They got it because the numbers, the contracts, and the systems held up under scrutiny. Audit your own agency against that standard before a buyer does it for you.

The 90-Day Pre-Diligence Audit

Before you engage an investment bank or broker, run your own version of what Martis Capital ran on Deerfield's books.

Pull your last three years of P&L and tag every dollar of revenue by client and by channel. Calculate your top-three client concentration as a percentage of total revenue. If any single client exceeds 20%, start the diversification plan before you start the exit plan. List every contract without a current signature or with missing IP assignment language. Document your top five recurring operational processes in writing, the ones that would break if a specific employee left tomorrow.

This audit takes 90 days if you start it seriously. It takes considerably longer if you wait until a buyer's diligence team finds the gaps first, because by then you are negotiating from a weaker position with a shorter clock.

The agencies that hit premium multiples did this work quietly, over years, before anyone made an offer. That is the actual takeaway from the Deerfield number. Not the multiple. The preparation behind it.

The Earn-Out Trap for Unprepared Sellers

When a buyer cannot verify your numbers with confidence, they do not walk away. They structure the deal to protect themselves. The most common protection mechanism is an earn-out: a portion of the purchase price paid over 12-36 months, contingent on the business hitting specific performance targets after close.

Earn-outs are not inherently bad. They bridge valuation gaps when the seller's story is stronger than the seller's proof. But they create a structural problem: you are now being paid based on performance you can influence but no longer control, because the buyer runs the business after closing.

I have watched earn-outs go sideways when a buyer changed the sales process, reassigned key accounts, or merged the acquired team into a larger operation that disrupted the delivery model. In each case, the seller hit their own internal targets but missed the earn-out metric because the buyer's post-close changes altered the environment the metric was designed to measure.

The defense against this is negotiation, not avoidance. Define the earn-out metric precisely. Require audited measurement. Include a dispute resolution mechanism that does not default to "buyer decides." Secure operating covenants that prevent material changes to the business during the earn-out period without mutual consent.

A well-negotiated earn-out can add 20-40% to total transaction value compared to a cash-only offer at a lower multiple. A poorly negotiated one is a discount dressed up as upside. Know which one you are signing before you sign.

FAQ

Q: Is 12-14x EBITDA realistic for a non-healthcare agency?

Rarely. Most non-regulated agencies land between 3x and 6x. A handful of specialized, scaled operations push into 7-9x. 12x-plus is almost always tied to a structural moat like regulatory complexity.

Q: What single factor most reduces an agency exit multiple?

Client concentration. A single account above 20-25% of revenue signals unacceptable risk to most buyers.

Q: How long before a planned sale should I start preparing?

18-24 months minimum. Buyers want two to three years of clean trailing financials.

Q: What does "up to $280M" actually mean?

It signals a structure with cash at close plus earn-out or deferred consideration tied to future performance. Always ask for the cash-at-close figure separately.

*Jeff Barnes, MBA has no personal position in any company, fund, platform, or tool named in this article. demg.ai has no current commercial relationship with any party mentioned. demg.ai provides marketing education and systems for owner-operators, not investment advice. Past performance does not guarantee future results.*