Your Primer to Healthcare Mergers and Acquisitions

Category: Healthcare Sectors

Healthcare Sectors, Market Trends
When Is It Time for an ASC To Consider a Strategic Partner?

The ambulatory surgery center (ASC) market is changing rapidly. Surviving in the current market is no longer as simple as meeting the needs of the community you serve. Competition among ASCs is now measured through a litmus test of strength based on collateral along with quality standing. These are now the deciding factors that determine winners and losers in the market.

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Healthcare Sectors, Market Trends
How Artificial Intelligence is Reshaping Healthcare: 10 Key Takeaways

The pandemic brought rapid and tremendous disruption to the healthcare industry, forcing the healthcare ecosystem to account for new pressures and challenges. The disruption also compelled many companies to halt or slow their short- and long-term plans and evaluate what they could do better and how they could achieve the improvements needed to support a struggling healthcare system. 

As we transition out of the pandemic or continue to learn how to live with COVID-19, now is the time for healthcare providers and medical device companies to shift from responding to the pandemic to recovering from it. Organizations and companies that understand this evolving demand curve will need to substantially change the way they plan strategically, and that includes incorporating virtual components or expanding their usage of these solutions. What is apparent is that the recovery from the pandemic will be partly — if not heavily — fueled by the development and integration of new technologies, particularly those powered by artificial intelligence (AI) and machine learning.

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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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Healthcare Sectors, Market Trends
Reflections on Healthcare M&A in 2021 and Expectations for 2022

Every January, as we begin conversations with healthcare business owners who are considering the sale of their companies, we are often asked about the previous year's market and what predictions we can offer for the new year.  2021 offered some continuing challenges due to the ongoing global pandemic, but there was still significant activity in healthcare M&A.  While 2022 is still just days old, VERTESS is keenly aware of developing trends that we believe will continue throughout the year. As each VERTESS team member has a long history in specific healthcare sectors, we are reviewing the previous year for each of those sectors as well as some projections for 2022. 

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Healthcare Sectors, Market Trends
SUD Treatment Industry Trends and Developments

We recently heard of an investor bidding more than 20x forward-EBITDA on a residential substance use disorder (SUD) treatment center with a 30-day due diligence period. This caught our attention. More poignant was that this bidder lost the deal to another investor.

It is no new news that SUD treatment providers across multiple segments are currently worth more than they ever have been historically. When Pitchbook released its 2021 Q3 report on the behavioral health vertical, we learned that in only nine months, more deals and more deal value were transacted than the previous best year on record in 2019. Some experts anticipate 2021 to finish at least 40% higher in both metrics than 2019, and SUD treatment — residential treatment, in particular — makes up a substantial portion of that activity, due to extraordinary utilization of benefits and new product designs from insurance carriers that promote mental health reimbursements such as Anthem’s “Behavioral Health Advantage” plan that is expected to launch in 2022.

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Healthcare Sectors, Valuation
Understanding and Valuing a Freestanding Emergency Department

Freestanding emergency departments (FSED) have seen substantial growth over the past two decades. Research published in the Western Journal of Emergency Medicine states that the National Emergency Department Inventory determined in 2001 that about 1% of all emergency departments (ED) in the United States were FSEDs. Fast forward to 2016 and the Medicare Payment Advisory Commission reported that FSEDs had accounted for 11% of all EDs nationwide. Grand View Research is projecting that the U.S. FSED market size, which was valued at around $3 billion in 2019, is expected to expand at a compound annual growth rate (CAGR) of around 5% from 2020-2027.

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Exit Planning, Healthcare Sectors
Medtrade Edition - Selling Your DME Business: How to Time the Market for an Exit

Is it possible for the owner of a durable medical equipment (DME) company to time the market to maximize an exit? That depends. Successful transactions come together when the following three conditions are in sync:
1. The business is ready for external scrutiny.
2. The owner is personally ready for a transition.
3. The timing of the capital market (macro) and the DME market (micro) are favorable.

The seller and a merger and acquisition (M&A) intermediary can influence control over the first two of these conditions. The third condition, on the other hand, requires a bit of luck. Let's take a closer look at these conditions and their importance in a successful transaction.

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Exit Planning, Healthcare Sectors
The Story of My Sale: Spero Recovery

I recently joined VERTESS as a managing director. I'll be providing merger and acquisition (M+A) and consulting services primarily to the behavioral health and substance use disorder (SUD) treatment markets. Like many of my new colleagues, I previously owned and operated a company in the space I will be working in for VERTESS. But that's not all: I also have firsthand, personal experience with substance misuse.

In this column, I'll share a little about this journey with you, how it motivated me to open my company, and several of the key lessons I learned from the sales process.

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Healthcare Sectors
Good Hope Manor: Getting Rewarded for Doing Good

The story of Good Hope Manor is one that's easy to get behind. Launched in 2003 by Linda and Chris Witzlib, Good Hope Manor is an intellectual/developmental disabilities (I/DD) company providing residential and day supports to adults via six integrated, community-based group homes around Wisconsin.

Good Hope Manor earned its reputation of providing the highest quality residential care to its clients. The team offers all types of services for mentally handicapped individuals and provides a supportive environment regardless of a client's medical conditions. Every resident is treated like a member of the family and receives a wide range of services that can include special diet plans, diabetic care with insulating administration, independent living therapy, transportation, entertainment, music and pet therapy, and hospice care.

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Healthcare Sectors, Valuation
What's the Value of Your Dental Practice?

Few dentists are aware of the market value of their dental practice. Moreover, most don’t understand how industry experts (e.g., accountants, bankers, dental practice brokers, and buyers) determine the value of dental practices.

In this column, I'll be helping you better understand how the value of a dental practice is determined. Let’s begin with some of the key performance indicators that buyers look for when evaluating dental practices.

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Healthcare Sectors, Market Trends, Valuation
Retail Pharmacy Update: Opportunities, Challenges, and Valuations

Prior to the pandemic, the retail pharmacy industry was experiencing significant disruption. We were witnessing a steady increase in transactions and consolidation, Amazon's entry into the market, significant changes to strategic alliances between major payers and pharmacy benefit managers (PBMs), and the introduction of a wide array of new technologies, just to name a few noteworthy trends and developments. It's safe to say that COVID-19 not only disrupted some of these disruptors, but it also brought with it new disruptors.

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Healthcare Sectors
TBI Duluth: A Residential and Community Services Success Story

TBI Duluth is a remarkable story. The company is comprised of two companies headquartered in Duluth, Minn.: TBI Residential and Community Services and Pathways to Achievement. TBI Residential and Community Services provides residential foster care services, operating 29 licensed homes for adults ages 18 and up. Pathways to Achievement provides high-quality home healthcare and support services. The business serves clients with complex physical and emotional needs, providing care involving medical, behavioral, and everyday living skills.

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