“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Mark Twain
The unstable and rapidly changing environment of today’s healthcare marketplace has intensified the interest of healthcare executives, physicians and business owners in the benefits of merging with, acquiring or being acquired by another entity with a common vision. When undertaking these endeavors there are many advantages to be gained, but there are many pitfalls that must be circumnavigated. In this posting I’ll share my thoughts on the importance of engaging a transaction expert to help assure an effective and efficient process.
When opportunity knocks you may want to look through the peephole before opening the door. The decision to embark on a merger should be made only after performing a feasibility analysis that examines key indicators such as financial advantages, operational compatibility, agreement among the parties about what the transaction is expected to accomplish and whether or not the newly formed entity would in fact generate business benefits not possible if each entity remained solo. The fact of the matter is that some prospective suitors may have hidden agendas and you do not want to be adversely impacted by the burden of their financial or operational difficulties.
Once the proposed transaction passes the feasibility analysis, what follows is a time consuming and complicated process. Because of their broad experience, transaction consultants see a wide set of business scenarios in diverse, as well as common, business models. This range of experience will serve to accentuate the transaction’s benefits and be of great help if unexpected issues arise; and unexpected issues almost always arise. The consultant can effectively deal with each issue and move the transaction to completion.
The consultant will also help you leverage your time. Successful transactions require a tremendous amount of communication and coordination with the various parties involved, including but not limited to, you and your management team, the management team from the other company, outside accountants, attorneys and numerous support groups such as medical billing/collection firms. As the transaction process ensues you still have a business or a practice to run. If the attempts at a transaction fail, and most of them do, you do not want to exit the process with a diminished organization that is in need of repair.
The seasoned transaction consultant also brings a wide set of relationships. Perhaps most importantly, if the decision is definitively made to find a suitor and the initial transaction does not come to fruition, then the consultant can not only pinpoint strategic buyers within the industry, but they also have relationships with other potential buyers, such as private equity groups that, in fact, typically pay more than a strategic buyer.
A good transaction consultant is also a financial expert. The components of a transaction are often complicated and you can leverage their financial acumen to fetch the highest price possible for your organization. Effective communication with the various internal and external accountants is imperative, so the ability to navigate through, understand and apply the content of complicated and voluminous financial statements will provide many benefits to your cause. The importance of the benefits you will receive from this understanding of the financial intricacies of the deal cannot be overstated.
It is important for executive leaders to know how much they don’t know. Utilizing the talents of a transaction consultant during the merger & acquisition process will help you achieve the outcome you desire, and help you avoid learning expensive lessons along the way.
To schedule a one to one free initial consultation with one of BHMs leading healthcare consultants please email us at firstname.lastname@example.org or call us at 1-888-831-1171. BHM consultants provide real value and measurable results to healthcare firms, government agencies, and insurers through data driven and strategic management analysis, and assist organizations with Clinical Operations, Financial Management Improvement, Physician Advisor Services and Accreditation.