M&A Advice from Healthcare CEOs
Corum recently hosted a sellers' panel featuring individuals who sold their healthcare companies. These CEOs/founders shared insights learned in the selling process - much of which was excellent advice for those looking forward to an M&A event. The following summarizes the advice of one executive, Charles Bell.
Mr. Bell founded and led the healthcare technology company Intego Systems, and sold it to Critical Alert Systems in February 2012. In light of his experience, Mr. Bell described several important characteristics of the M&A firm that he would recommend to orchestrate the sale of his company:
- Experience putting the right material together and first-hand access to the buyer community,
- Professionals who know how to maintain confidentiality throughout the process,
- A success-based fee structure and a cap on expenses,
- A proven record for business valuation analytics and knowledge of deal structure,
- Experience in the healthcare industry, and most importantly
- Good chemistry with the people he would be working with on a daily basis.
Bell then enumerated the important steps and cautions he’d observed in the M&A process:
- You have to pitch the deal. Do your homework on each company before you present. Determine why each prospective buyer would be a good fit. Some potential buyers will be disqualified during this evaluation.
- Decide which company most aligns with your objectives.
- The due diligence process takes a lot of time, so be prepared for the long-haul. It was tough to continue working in the business while managing this process, yet absolutely crucial.
- Negotiating the purchase / sell agreement was the hardest part. Make sure to do your homework up front and determine with your CPA which route(s) to pursue (asset sale vs. a stock deal, structure, etc.). And, be sure you secure a good M&A attorney to help you through this process; they will be worth every penny you pay them.
This is great perspective extracted from a successful acquisition process. When the time comes, Corum has a refined and proven methodology to optimize the outcomes for price, structure and timing. We look forward to working with you.
Posted by robschram, Director on 25 May 2012