Your Primer to Healthcare Mergers and Acquisitions

Author: David E. Coit, Jr.

Valuation
Can They See Your Value?

The measure of value for any healthcare company is obviously about results, financial and otherwise. It also refers to the clarity of presentation of value and, as Berman, Knight, and Case write in Financial Intelligence, “the art of using limited data to come as close as possible to an accurate description of how well a company is performing.” When “accurate” becomes “cloudy,” it usually translates into questions and doubt, whether for a funding source, buyer or a potential investor.

Here are some reasons why the quality of your financials is so important.

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Healthcare Sectors, Valuation
Why It’s Critical To Know The Value(s) Of Your DME Company

Most owners of Durable Medical Equipment (DME) companies regularly attempt to estimate the value of their company. Unfortunately, their estimates can significantly differ from the marketplace “reality,” depending on a number of factors. “All healthcare related companies sell for 2 times annual revenue”, or “My DME should be worth the sum of all of the monies I invested into the company,” or “I wouldn’t consider selling my DME for less than 10 times annual profits” are common refrains among owners who may be in for a rude awakening when they attempt to sell their company.

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Healthcare Sectors, Valuation
6 Ways To "Look Under The Hood" And Build Value In Your SUD Company

The Substance Use Disorder (SUD) marketplace is dynamic and continues to be impacted by many factors. The valuation of SUD programs is also subject to change, ranging from in-network vs. out-of-network reimbursement and in-house labs to the increasing focus on outpatient services and longer-term social support. We can expect more flux that will affect how SUD companies are valued.

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Valuation
Why Getting A Valuation Of Your Healthcare Company Might Be The Most Important Thing You Do In 2018

Healthcare business owners rarely seek a valuation for their company unless they consider it a necessity. They will get a valuation because they must settle a shareholder/partner dispute, it’s required to resolve a divorce, or it’s essential to obtain a loan or line of credit (LOC). The problem with this way of thinking is that most healthcare business owners miss the opportunity to better understand the value of their company, how to strategically increase value over time, and how to integrate a valuation with longer-term personal planning.

Here are several key reasons why securing a valuation of your healthcare company might be the most important thing you do this year.

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Exit Planning, Market Trends, Valuation
7 Key Healthcare Value Drivers in 2018

Today’s turbulent healthcare industry offers many challenges for healthcare executives. Despite this, providers can create significant value that will help them to build their healthcare businesses, finance growth, and ultimately sell their companies for the best price. Seven key value drivers for healthcare owners in 2018 include the following

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Exit Planning, Healthcare Sectors, Valuation
9 Ways To Maximize The Value Of Your Specialty Practice

Specialty physicians typically have high-demand skills, possess great passion for their specialty, work ungodly hours, seek out the newest therapeutic developments, and do what they can to advance the standing of their profession in the minds of the public.

Specialty physicians also face unique challenges when preparing for a life transition, such as retirement. For many, their practice is a part of who they are, making it difficult to give up control. Many wonder: What will life be like without my professional identity?

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Exit Planning, Healthcare Sectors, Valuation
9 Ways To Get The Value Of Your Specialty Practice Right

The instability of the healthcare market and anticipated reimbursement changes under TrumpCare have created some challenging questions for specialty practice physicians who are planning for retirement:

How do I best prepare myself for a transition?
Will I be able to sell my practice to another physician or buyer?
What is my practice worth if sold today?

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Market Trends, Valuation
5 Ways The New Healthcare Market Is Revolutionizing Valuation Models

The valuation model for healthcare businesses is evolving as quickly as the healthcare marketplace itself. While multiples of adjusted EBITDA (eaarnings before interest, taxes, depreciation and amortization) remain a standard for a quick-and-dirty analysis, this approach can't provide an accurate and complete picture of a company's potential value.

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Exit Planning, Valuation
5 Ways To Increase The Financial Value Of A Healthcare Company

Owners of healthcare companies are accustomed to creating financial value by focusing on the traditional approaches of scope of services, client/patient capacity, and revenue streams via reimbursement yield and patient volume.

While revenue growth and operational efficiency are key value drivers, neither addresses a critical value factor known as Company Specific Risk (CSR). Differences in CSR are the primary reason that some healthcare firms get top dollar when sold, while others receive only a fraction of their potential sale price.

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Exit Planning, Valuation
The 3 Secrets Of Market Multiples

Have you ever wondered why two seemingly similar companies sell at significantly different multiples? What are buyers seeing in ostensibly comparable companies that causes sale price differences? The three secrets of market multiples are...

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Exit Planning, Valuation
Why High Quality Financials Matter For Healthcare Firms

The financial value of a healthcare company is obviously based on its bottom line. However, great financial results mean little if other people, especially investors or potential purchasers of the business, aren't confident that they represent reality.

Here are four reasons why the quality of your financials is so important.

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Valuation
5 Warning Signs A Business Valuation Is Bogus

Business valuation should be based on qualitative and quantitative factors.  Unfortunately, some valuators don’t truly understand the qualitative nature of valuation.  A such, CEOs, investors, and business owners often unwittingly rely on erroneous valuations.  Any one of these five significant red flags should alert you to seek another opinion of value.

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