ThE “ENhANcEd PROcESS” OF SEllING hEAlThcARE SERvIcE cOmPANIESzation). This re-cast of your financial statement shows the true earnings
of the business as though it were already acquired by the purchaser. It is
imperative to make all “reasonable” adjustments to your expenses while
not being aggressive to the point of losing credibility with an acquirer.
This process is much more of an art than a science and will become a
key element in the negotiation of price and terms.
Our example business was a rehabilitation company with nine clinics,
approximately $7 million in revenue, and EBITDA of $1.75 million. We
showed a clear strategy for the business to grow by two to three clin-
ics per year over the next five years, creat-
ing a twenty-plus clinic company that would
eventually have revenues of $15 million and
an EBITDA of $3 million. The CBP was
very specific in describing how and where
the growth strategy would be executed, with
full buy-in from the owners that the growth
strategy was in fact a reality.
The next step of the Preparation Phase is to
create a single page Fact Sheet and a com-
prehensive Non-Disclosure Agreement (NDA). The Fact Sheet displays
the basic financial and operating data with a few basic highlights of the
business, without revealing the name of the business. The NDA is tied
to the specific Fact Sheet with a reference number.
Next, develop a complete list of all possible acquirers to include stra-
tegic and financial acquirers. The list can be developed by your current
database, as well as research in the particular industry. An expert in the
industry guiding you in this process should have a fully developed list
of all acquirers within the industry, and this list will add enormous value
to the process.
For our sample company, a Fact Sheet and NDA were developed and a
list of ninety possible acquirers was prepared.
PhAse tWo - MARketIng PhAseThe objective of the Marketing Phase is to confidentially expose the
business to all qualified acquirers, with the result of selling the busi-
ness to the acquirer that is the best fit for you and your company. This
Acquirers are buying
the growth, and the
better you can describe
and objectively show
that the business can
execute on a growth
strategy, the more a
buyer will pay.