Maximizing Your Value in Mergers and Acquisitions
By Julie Decker and Nishen Radia, FocalPoint Partners, LLC
Not since the 1990's has there been such a surge of buyouts and merger activity among home infusion providers.
Currently, this activity makes selling your company sound economic sense. In today's market, buyers enjoy the benefits of consolidation, economies of scale and entry into new markets, which enables them to offer sellers high valuations. However the myriad of legal issues--financing considerations, and differences in corporate cultures—means that the process needs careful management, experience, and expertise to ensure a successful outcome. Over the next several months, we will address many of the issues that are most critical when planning to sell or recapitalize a company. Whether it is how to maximize the value you receive for your company or how to manage in the run up to a sale, the questions we will answer are questions that every healthcare entrepreneur should be asking.
In the October issue of
Rock-Solid Intelligence we will discuss the specific variables and several ways in which to value a company, either as a seller or a buyer. We will talk about ways to position a company to highlight its strengths and achieve valuations that exceed the industry “standards” that people often refer to.
Since company earnings and cash flow are a major component in any method of valuation, accounts receivables and collections management are critical during an acquisition or merger. In the November issue we will discuss how to maximize these and how the collections process may influence a sale.
Even the most successful sale may result in suboptimal profits if tax planning has not been adequately considered. This will be the topic discussed in December.
Although financial considerations are usually the main drivers of the M & A process, issues such as compatibility of corporate cultures, succession planning and employee retention may ultimately determine the success or failure of a merger. These issues will be addressed in Rock Solid intelligence in 2007.
We look forward to
sharing our knowledge and experience with you in the coming months and to help you capitalize on this attractive time in the market cycle.