Your Primer to Healthcare Mergers and Acquisitions

4 Reasons Why It's So Hard To Make A Great Offer

Jun 24, 2014

by Tom Schramski

By Tom Schramski, PhD

Volume 1 Issue 11, June 24, 2014

Recently, I was working with an executive who was interested in purchasing another company as part of his organization’s strategic plan.  As he attempted to make an offer, we struggled through several stages of “What needs to be in the offer?” “This may be more than we can handle,” and, ultimately, “What if the business tanks after we buy it?”  Whether you are a buyer, seller, or standing on the sidelines, these are all very reasonable concerns.

Many excellent opportunities in all areas of life are missed for reasons that are not primarily financial.  Here are four examples of why it’s often tough to make a great offer:

  • You don’t really know your own business and marketplace very well and you may, in fact, have an underperforming business yourself.  This is an issue of competence.
  • You don’t feel comfortable with the spontaneity that is required in fluid situations where tactics must change to serve a larger strategic vision.  This is an issue of confidence.
  • You don’t have the necessary internal resources available to deploy for a new venture and/or the acquisition of an entity that will challenge you to take it to the next level.  This is an issue of capability.
  • You have a limited perspective of what it takes to make a transaction work and you don’t want to hear “no” at any point in the negotiations.  This is an issue of courage.

There is always risk that we naturally try to mitigate in any type of professional transaction.  The risk increases with the size and complexity of the deal, as do the attempts to limit that risk.  But what is sometimes lost in transactions gone astray is attention to the basic characteristics of great deals – the competence to undertake a valuable action, the confidence that you can do it, the capability to make it work for your stakeholders, and the basic courage to move forward in a world of imperfection.

Tom Schramski

Tom Schramski PhD, CM&AA

Founder

Tom was the Founder and Managing Partner of VERTESS. He was a Certified Merger & Acquisition Advisor (CM&AA), consultant, and Licensed Psychologist with over 35 years of very successful national experience in the healthcare marketplace, including co-founding and building a $25 million behavioral health/disabilities services company. Tom represented sellers and investors across the healthcare spectrum and was recognized for his executive leadership in the 2005 Entrepreneur of the Year issue of Inc. Tom passed away in December 2018.

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