Your Primer to Healthcare Mergers and Acquisitions

Author: Bradley M. Smith

Healthcare Sectors, Market Trends
TrumpCare Means "Yuge" Spending On Healthcare IT

Every sector of the healthcare industry is struggling to figure out what TrumpCare will mean to their businesses. Some will do better under TrumpCare, but most will do worse. There is one sector, however, which is guaranteed to grow like gangbusters under a Trump administration: Healthcare IT. Here’s why.

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Healthcare Sectors, Market Trends
8 Ways DME Companies Can Thrive

Several years ago, DME competitive bidding was instituted by Medicare and the impact has been dramatic. Many smaller DMEs that could not successfully compete sold their assets, restructured their business, or simply closed their doors.

Other DME companies, however, saw an opportunity to be exploited. In my national DME merger and acquisition practice, I've seen a number of success stories of companies that have both survived and thrived in this increasingly competitive environment. Here's what they did.

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Market Trends
The Rise Of The Search Fund: 4 Important Considerations For Healthcare Business Owners

Search funds, originally conceived in 1984, are investment vehicles through which investors financially support an entrepreneur’s efforts to locate, acquire, manage, and grow a privately held company. A 2013 study by the Stanford Graduate School of Business tracked nearly 200 search funds with investments in the US, Canada, Latin America, and Europe and found that the aggregate pre-tax internal rate of return was 34.9% for these funds. The aggregate pre-tax return on invested capital was 10x. With these results, search funds have become an attractive alternative to classic Private Equity Group (PEG) investment in healthcare.

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Exit Planning
When It Doesn't Work: 7 Reasons Why Some Healthcare Businesses Don't Sell

With over 50 combined years in the healthcare marketplace, we have seen many successes and some initial failures when representing healthcare owners who could not sell their businesses.  In these latter examples, they learned a hard lesson and, fortunately in some cases, were able to eventually transact.

Here are seven reasons why they encountered failure the first time around.

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Healthcare Sectors, Market Trends
7 New Opportunities For Today's DME Entrepreneur

With the multitude of changes and challenges in today’s Durable Medical Equipment (DME) marketplace, successful entrepreneurs are seeking new opportunities where they can employ their skill and experience.  Typical questions include:  What opportunities and markets are right for our company and our customers?  How do I successfully enter new, parallel markets without jeopardizing our current DME operation?

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Exit Planning, Healthcare Sectors, Market Trends
The Whys And Hows Of Seeking Private Equity Investment: From Urgent Care To Long-Term Care

Today, private equity groups (PEGs) have a growing presence as buyers of lower middle market healthcare companies.  Why?  They see the continuing expansion and diversification of healthcare opportunities, ranging from a local group of urgent care centers with wellness options to an array of senior living services with exceptional life quality.  PEGs have increasingly moved “downstream” to healthcare companies with annual adjusted EBITDA as low as $500,000, which are regarded as “tuck ins” to existing operating platforms.

Why would a seller of a healthcare company want to consider a PEG as a buyer? Here are three good reasons

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Exit Planning
When Timing Makes A Difference: 3 Critical Elements In Executing Your Transition

The current healthcare marketplace is filled with entrepreneurial opportunities and many business owners are considering whether the time is right for their exit.  Each circumstance is unique and there are three important factors that today’s healthcare business principals are considering before finalizing their exit plans.

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Market Trends
Are PEGs Knocking At Your Door? 6 Ways To Make It Happen

In today’s marketplace, we see the growing presence of private equity groups (PEGs) as buyers of lower middle market healthcare companies. PEGs have increasingly moved “downstream” to smaller companies with adjusted EBITDA as low as $500,000.  This has increased the opportunities for smaller companies as long as they understand that the “buyer eyes” of PEGs can be quite different from those of more familiar strategic buyers.

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Healthcare Sectors, Market Trends
Has The Sky Fallen? 4 Great Reasons To Invest In DME

While the world of durable medical equipment (DME) has experienced more than one random acorn via competitive bidding and related market turbulence, there remain tremendous opportunities for those than can see beyond self-imposed despair and false conclusions.

Here are four reasons that you may want to consider as you look for potential DME investments.

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