Your Primer to Healthcare Mergers and Acquisitions

Category: Exit Planning

Exit Planning
Accelerating Healthcare Growth Through Acquisition or Recapitalization

Many small healthcare business owners struggle when they achieve a certain size or revenue stream. While these owners may see an opportunity to scale, there are challenges: They still have the "mom-and-pop" ideology (i.e., small company mentality) and their organization is not ready or capable of scaling up. This can be a frustrating experience for an owner. They feel their company can do so much more business, yet they lack the capital, know-how, technology, and/or experience to transform their organization from a small business (e.g., $20 million in revenue) business to a much larger business (e.g., $100 million in revenue).

Such a situation is risky for a business owner. If the owner attempts but struggles to grow the revenue and/or EBITDA of the company, this could greatly devalue the business in just a few years. But that doesn't mean owners should abandon their vision for growth. Rather, they may want to explore a sale or recapitalization.

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Exit Planning
Considering Selling Your Healthcare Business? Please Don't Do This

In this column, I want to talk about an alarming and growing trend — one that's leading to healthcare business owners getting paid much, much less than they deserve for their company or other potentially disastrous outcomes.

This trend concerns owners selling their companies to cold callers.

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Exit Planning, Valuation
Preparing Your Healthcare Company's Financials for an Exit

During the healthcare M+A process, the benefit of accurate financials cannot be understated. Financial reporting is the foundation on which your business is valued, and meaningful data presented in an organized fashion can lower a buyer's perceived risk. This likely means more money in your pocket on the closing date.

Yet, it is an all-too-common occurrence to see frustrations arise as a healthcare business owner works through the financial due diligence process. The lists are exhaustive, the requests elaborate, and the stakes high. By taking a few steps, even 3-6 months before you go to market, the due diligence process can be simplified in an impactful way. Sailing through financial requests allows an owner's focus to be rededicated to other, equally important parts of the sale process.

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Exit Planning, Market Trends
Perspectives on Selling Your Healthcare Business in the Coming 24 Months

In this SalientValue column, I'm going to touch on a number of points I hope healthcare business owners will find helpful as they consider the current position of their companies and plan for their futures. There are warning signs ahead, and having been through the ups and downs of various business cycles, I'd like to highlight some concerns and share some recommendations.

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Exit Planning
Thinking of Exiting Your Healthcare Business?: Planning the Perfect Exit

Numerous books, articles, webinars, and other media provide detailed exit planning strategies for healthcare business owners.  This article aims to provide owners with a concise primer on key actions to take and essential questions to answer that can help better prepare themselves and their healthcare businesses for an eventual exit.

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Exit Planning
10 Healthcare Transaction Deal Killers - and How to Avoid Them

Two of the most frequent questions sellers of healthcare businesses ask VERTESS Healthcare Advisors are, "What can go wrong? How can I prevent my deal from falling apart?" Some deals are simply destined to fail, whether it be because a buyer or seller changes their mind or the parties come to an impasse. But then there are those potential deal killers that can be avoided.

Based on some recent experiences, my colleagues and I have compiled 10 reasons deals have had the potential to fall apart and offer recommendations for what you can do to reduce the likelihood that your deal experiences an unfortunate ending.

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Exit Planning
'Certainty of a Close:' A Crucial Healthcare M+A Factor

It may seem like a no-brainer that healthcare business owners who are about to embark on a transactional journey would have considered how likely a potential buyer is to actually facilitate the close. Yet surprisingly, this idea of "certainty of close" is often overlooked by would-be sellers in potential healthcare M+A transactions.

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Exit Planning
Evaluating M&A Advisors: 5 Questions Healthcare Business Owners Should Ask

Thinking about selling your healthcare business? Then you undoubtedly have many questions. And if you've looked to Google to get answers, you've probably found that your searches have yielded divergent, overly complex, or abnormally vague responses. Why can't you find clear answers?

It's because the answer to most of your questions is: It depends. There are many factors that influence the sale of a healthcare business. But that doesn't mean your questions aren't worth asking. There are no bad questions to ask when contemplating one of the biggest — if not the biggest — decisions of your career. To get answers to your questions, don't turn to Google. You'll want to turn to an M&A expert. Getting clear and correct answers to your questions is one of the many reasons why having an M&A advisor will make a big difference as you proceed with a sale. But first you need to find the right advisor.

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Exit Planning
Selling a C Corporation: Key Tax Implications You Should Understand

Depending on your healthcare company's corporation type, there are different tax implications you will want to be aware of long before you are ready to sell your business. One type of company that brings with it tax implications that often catch owners off-guard or create challenges when owners are ready to pursue a transaction is C corporations (C-corp).

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Exit Planning
Improving Integration Success Following a Healthcare Transaction

At VERTESS, we often get a first-hand look at the good, the bad, and the ugly of post-transaction integration. No two healthcare deals are transacted the same, and no two deals will ever integrate the same. The simple truth is integration is just as much a process as completing a merger or acquisition — and likely a lengthier one as well.

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Exit Planning, Healthcare Sectors
Preparing to Sell Your DME Company: 7 Steps to Take Before Proceeding

When the time comes for you to sell your durable medical equipment (DME) company, there will be a lot of work required to go from putting the company on the market to completing the transaction. But if you want that sales process to go smoothly, there's a good deal of work you'll want to complete before you start.

Here are seven of the key steps you should take that will better help ensure your company sells for a fair price and to the right buyer.

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Exit Planning
Healthcare Mergers and Acquisitions: Understanding M&A Terminology

If you are looking to acquire or sell a healthcare business, something you will quickly find is that there is a lot of terminology and lingo specific to mergers and acquisitions (M+A). M+A has its own diverse vocabulary. The more you understand these terms, the easier it will be to engage in the transaction process. Even a surface-level understanding of key concepts will at least provide a foundation to better participate in conversations and ask more in-depth questions.

Below is a list of some of the most common terms and acronyms you are likely to encounter in your discussions and review of documentation. If you come across an unfamiliar concept, do not hesitate to ask one of your M+A partners, such as an advisor like VERTESS or your healthcare attorney, to explain it to you. During the M+A process, ignorance is definitely not bliss.

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