Your Primer to Healthcare Mergers and Acquisitions

5 Ways To Help Buyers Acquire Your Company

Jun 10, 2014

by Tom Schramski

By Tom Schramski, PhD

Volume 1 Issue 10, June 10, 2014

Though it may sound odd, one of the most important tasks for the seller of a healthcare business is enabling the buyer to successfully make the purchase.  While there is an incredible wealth of valuation information available to today’s buyer, a successful transition often relies on the ability of the seller to assist the potential purchaser in some critical areas.

I suggest five important ways in which the seller can assist buyers:

  • The seller needs to clearly understand their goals and objectives for the sale, whether financial or otherwise.  This type of clarity may eliminate some buyers, but is actually attractive to focused buyers who want to know that the investment of their time, especially in due diligence, is well spent.
  • It is essential to recognize what buyers are looking for in your marketplace as well as the relative value of your company.  This allows you to anticipate questions, to respond with integrity, and to maintain a comprehensive view of the opportunity.
  • If you understand the process of selling through a typical transaction, you increase your tactical flexibility when questions and offers come your way.  Buyers see this as a value increaser for them and it adds an element of trust to a relationship that could be challenged in due diligence.
  • When you are prepared to give buyers critical information in a usable format (e.g. trailing twelve months [TTM] P&L activity in an Excel-type spreadsheet), you increase the ability of the buyer to acquire you.  This is particularly true with larger buyers who may have to “make their case” to more senior executives and/or internal M+A committees.
  • Since the buyer is ultimately focused on the future, provide information that helps them to better see the future opportunity.  While TTM is the closest a buyer might get to estimating the future, you can project the impact of other opportunities that will increase your value.  This is especially important if your results are stagnant by choice or you are managing a “rocket ship” where future economic outcomes will clearly surpass the results of the recent past.

We always talk about looking through the “buyer’s eyes” to widen your perspective while maintaining your stance.  There is a balance between appreciating the perspective of another, while not necessarily agreeing with the buyer’s view.  If you try to maintain the balance, it increases your likelihood of a successful transaction just as it would in any successful relationship.

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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