ThE “ENhANcEd PROcESS” OF SEllING hEAlThcARE SERvIcE cOmPANIESacquirer’s attorney will typically draft the purchase and sale agreements
and other related legal documents.
It is not uncommon for acquirers to review the due diligence informa-
tion and attempt to “re-trade” the deal, meaning request a lower price
based on the findings in due diligence. This is where you absolutely need
to have an objective look at the buyer’s recommended changes to the
transaction by someone who “really” knows healthcare, as many times
the purchase price changes are
made based on operational or
financial changes in the busi-
ness. A highly skilled specialist
will be able work through these
negotiations and ultimately
protect the initial price and
terms.
For our sample company, there
were some specific legal and
due diligence items that caused
our M&A professional to work
closely with the seller’s attor-
ney and to provide specific in-
formation of the coding and metrics within the industry in order to keep
the transaction as initially proposed. We are confident that without this
skilled intervention this deal could have “blown up!”
The final stage of the Enhanced Process is the Closing. This is an excit-
ing and rewarding time for all, including the acquirer, seller, and all pro-
fessionals assisting in the transaction. This is typically the culmination
of six or more months of work and is when the buyer and seller truly
become one! The actual Closing in our current electronic environment
will most typically occur at a distance with documents being scanned
and sent by email and wire transfers for the exchange of monies.
sUMMARYIn summary, the owners of our sample company sold a majority portion
of their business to a strategic acquirer, thereby creating a new com-
pany with the acquirer having a majority interest and the seller having a
minority interest. The multiple of EBITDA was >5 and they were paid
Phase four is where you
absolutely need to have an
objective look at the buyers
recommended changes to the
transaction by someone who
“really” knows healthcare, as
many times the purchase price
changes are made based on
operational or financial
changes in the business, and a
highly-skilled specialist must
work through these negotiations.