Your Primer to Healthcare Mergers and Acquisitions

3 Things I Wish I Knew Before I Sold My I/DD Company

Nov 6, 2018

by Rachel Boynton

by Rachel Boynton, CMAA

Volume 5 Issue 23, November 6, 2018

Like many owners of I/DD companies, LifeShare, the company that I co-founded with my husband and grew for over 20 years, was a true labor of love. We started our company because of a significant gap in services in New England, as well as the desire to support someone close to our hearts. While my husband’s strength was to build, network and diversify, mine was to train, support and strengthen (not that we each didn’t have to wear all of the hats!). We made radical decisions; we beat the drum for independence; and we developed a team that helped create meaningful and relevant opportunities for children and adults with I/DD, as well as their families.

When my husband brought up the idea of selling our baby, I was completely unprepared. While we ultimately had a successful sale, largely because my husband had a great vision for a strategic buyer, there was a lot we didn’t know that could have produced more value in our transaction. Here are three key things that would have made a difference then, and certainly today:

Recognize that there is a high demand from buyers who are looking to purchase I/DD companies like ours. In fact, there are currently more buyers than sellers; especially in target healthcare markets like I/DD where the interest has grown substantially in the last few years.

These buyers range from other similar organizations looking to increase their footprints, to investment groups who creatively build portfolios of companies and often want current management to continue leading the I/DD company. If a seller has the right information and presents themselves well, they can choose the type of buyer to best fit their exit strategy and company’s needs. This approach can make an overwhelming process seem a bit more manageable, and even a little less emotional.

It’s a smart idea to create a long term “exit strategy” when considering selling.There are inefficiencies in every business, both financially and operationally, that can make your company look less attractive to buyers. Experienced M+A advisors can help to prepare an organization before going to market, by assessing the current situation, projecting future growth, and highlighting areas that may need a second look.

An objective outside set of eyes can help to ask questions that a buyer is likely to ask. Also, these inefficiencies translate to less money in your pocket at the time of the sale. By starting the conversation early, a seller can set strategic goals to exit at an established revenue and maximize the value of the company.

Buying and selling I/DD companies like ours happen every day, and there are people out there to help. There are many experts who can ensure a sale is done effectively and favorably for both the buyer and the seller. There are lawyers who specialize in M+A transactions, there are consultants who specialize in specific markets like human services or healthcare, and there are financial advisors who understand how to analyze current financial statements, project for the future and help suggest changes that increase proceeds for the sellers. Knowledge is power and surrounding yourself with experienced professionals can ensure you have the information to make an educated, sound decision for your sale.

There are undoubtedly other insights that can help I/DD company owners prepare for and execute a transaction. Having gone through the process solo, I learned that you can improve the outcomes for everyone involved, including the people served, if you take a long-term view and take advantage of the available resources in one of the most important journeys of your life.

Rachel Boynton

Rachel Boynton CM&AA

Managing Director

As Co-Founder of LifeShare, a multi-state human services and healthcare organization, Rachel has a unique background of over 20 years of successful operational and executive experience, in addition to an MBA in Healthcare Management. She began her professional life as a home care provider, an experience that created the foundation for the innovative quality and success of LifeShare, while also changing her life. At LifeShare, she managed their Operations (Adult Day/Residential; Child Therapeutic Foster Care; HCBS; Child Therapeutic Day/Diversion Services, and Educational Programming), Finance, HR and Quality Assurance (facilitating COA accreditation and policy/procedure implementation). After selling LifeShare to Centene, Rachel remained during the transition of management and helped to provide outcome measurements and COA compliance reporting. At VERTESS she is a Managing Director providing M+A advisor and consultant services, specifically in the I/DD, behavioral health and related healthcare markets, where systems are rapidly evolving, and providers are striving to adapt strategically to diverse challenges.

We can help you with more information on this and related topics. Contact us today!

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