Your Primer to Healthcare Mergers and Acquisitions

Category: Exit Planning

Exit Planning, Healthcare Sectors, Market Trends
DME and HME Owners: Take Advantage of This 'Goldilocks Market' (While You Can)

There's some good news for owners of durable medical equipment (DME) and home medical equipment (HME) businesses: The transactions market (i.e., mergers and acquisitions) is not too hot and not too cold, but just right at the moment.

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Exit Planning, Healthcare Sectors
Finding the 'Sizzle' in Your Human Services Organization

In years past, strong financial numbers were often enough to hook a qualified buyer. However, these days, buyers — especially those pursuing intellectual and/or developmental disability (I/DD), mental health, and substance use disorder treatment organizations — are looking for much more. They want to see if the organization has special qualities; something that stands out and will help propel the organization to new heights under new ownership. They are looking for the "sizzle."

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Exit Planning, Valuation
Is Your Healthcare Company Ready for Sale?

After years or decades building your healthcare company/practice, it's increasingly likely that you will find yourself thinking about the prospects of selling your company. You should understand the key "value drivers" of your company.

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Exit Planning, Healthcare Sectors
Selling Your I/DD Business: Why The Right Time Is Now

For many entrepreneurs, moving on from their business — especially if it's a business they founded — is one of the most difficult decisions to make. For owners of provider agencies that support individuals affected by an intellectual and/or developmental disability (I/DD), the decision can prove even more difficult when the owner has a personal attachment to and passion for the space. However, while many owners find it difficult to start the process of selling their business, the reality is that it's a necessary and important step. As the old adage says, "Failing to plan is planning to fail."

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Exit Planning, Healthcare Sectors
Magic 8-Ball: A Great Toy, But Not Great for Selling Your Business

What you will quickly learn is that the value of your company is directly tied to numbers — more specifically, your bottom line and quality outcomes. It doesn't matter how wonderful you believe your company to be. You discover that you didn't monitor your financials closely enough and there are probably some significant changes you should have made long ago. The good news is that if you plan wisely, you can avoid such a scenario and not need to rely on luck to secure a fair sale price for your business. Here are nine steps I would advise you to take instead of leaving the value of your company to chance.

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Exit Planning
Where's My Cash? Dispelling A Common Misconception About PE-Backed Acquisitions

Physician practice owners are often surprised to learn how private equity (PE)-backed companies structure their acquisitions and the relatively small amount of cash paid at closing. It's significantly less than owners (sellers) expected.
Below is a simple breakdown of how the proceeds from a typical PE acquisition works. The selling price is generally paid in three parts. Understanding the timing of these payouts may influence when owners choose to sell their practices.

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Exit Planning, Healthcare Sectors, Market Trends
Why You Should Sell Your Business In 2019 (Part 2)

In this second part, three of our other managing directors discuss why owners of ambulatory surgery center (ASC), home and community services, durable medical equipment (DME), and home health should consider exiting their markets this year.

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Exit Planning, Healthcare Sectors, Market Trends
Why You Should Sell Your Business In 2019 (Part 1)

Consolidation in healthcare picked up steam in 2018 and shows no signs of slowing down in 2019. This trend, along with other factors, is placing great pressure on providers of healthcare services to address a critical question: Is this the year to sell?

For many providers, the answer should be simple: yes.

In this first in a two-part series, two of our Managing Directors speak to why pharmacies and intellectual or developmental disabilities (IDD) service providers should sell in 2019.

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Exit Planning, Healthcare Sectors
3 Things I Wish I Knew Before I Sold My I/DD Company

When my husband brought up the idea of selling our baby, I was completely unprepared. While we ultimately had a successful sale, largely because my husband had a great vision for a strategic buyer, there was a lot we didn’t know that could have produced more value in our transaction. Here are three key things that would have made a difference then, and certainly today.

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Exit Planning, Market Trends
7 Reasons Why Some Healthcare Businesses Don't Sell (At First)

With over 60 combined years’ experience in the healthcare marketplace, we have seen many successes and some failures when representing healthcare owners who could not initially 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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Exit Planning
There Are No Unrealistic Expectations

There is an unfortunate term in the world of healthcare M+A intermediaries when they discuss a difficult, or even disastrous, transaction attempt: the “unrealistic expectations” of a potential seller. It is not uncommon for advisors to blame a failure on the seller’s resistance to adopting transactional expectations more in line with the “real world.” In my experience, this reaction misses the point and is a disservice to the client.

A more self-observant perspective considers the following...

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Exit Planning
8 Practical Strategies To Maximize Your Healthcare M+A Success

There is quite a bit written about the failure of mergers and acquisitions (M+A) activity, occasionally even competing with President Trump’s tweets. The reasons are as numerous as the transactions themselves, while the analyses tend to focus on sexy megadeals and the related personal intrigue of fractured family relationships (the sizzle that is apparently attractive in today’s deal world).

By comparison, a focus on what really drives value in lower middle market healthcare transactions is lacking. You don’t read about it in the statistics and you rarely hear a success story of how an organization built sustainable value over time, to the benefit of the owners, employees and customers. Fortunately, there are many success stories based on consistent strategies that healthcare entrepreneurs use to complete transactions.

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