Wednesday, September 13, 2017

Who's In...Who's Out?

It's September...the home stretch for baseball's 2017 regular season.  We'll soon know who's going into post-season play and who's out.

Regardless of whether a team exits the race early or advances to the World Series, all MLB GMs are tasked with addressing team needs to bolster playoff hopes or prep for the next season.  Their needs are generally unique.  Take the Phillies, for example.  This season they needed pitchers while the Mets needed players that stayed healthy.  And so it goes for all 32 teams...

The scenario reminds me of healthcare service platform companies.  Whether backed by private equity or publicly-owned, their management is generally focused on growing or gaining market share.  Take physical therapy - a sector we know well.  There are more than 20 PT platforms in the US, each with a unique seller profile, target geo or specialty and of course, budget.

For practice owners contemplating a sale, evaluating which platforms to approach can be overwhelming - and that's only a small part of the sales process.  As business brokers, our team touches all bases:  scouts the prospective buyers, manages due diligence, negotiates the contract and delivers the best deal for your business.

So, if you're interested in Selling...Call us (610-527-8400).  Let's hit one outta the ballpark together.

Wednesday, August 16, 2017

Surgery Partners Closes In on Acquisition

Nashville-based Surgery Partners cleared various regulatory hurdles to close in on the acquisition of National Surgical Healthcare by month end.  The acquisition yields a diversified inpatient and outpatient surgical provider with 125 surgical facilities, 58 physician practice locations operating in 32 states. >>Read more  Funding for the acquisition will be provided in part by Bain Capital Private Equity.

When announcing the proposed acquisition earlier this year, Mike Doyle, Surgery Partners CEO expressed the following:
“We are very excited about the acquisition of National Surgical Healthcare and welcome our new partnership with Bain Capital Private Equity.  I would like to welcome the NSH team and physicians. This transaction strengthens our market position and will provide new opportunities to introduce ancillary services to our expanded network of surgical facilities..."

Tuesday, August 08, 2017

KKR Healthcare Portfolio Increases

Buyout firm, Kohlberg Kravis Roberts & Co. (KKR), is adding life to its healthcare portfolio with planned acquisitions of Covenant Surgical Partners and American Medical Response (AMR).

Nashville, TN-based Covenant Surgical Partners is a leading operator of ambulatory surgery centers with 37 locations. >>Read more  Sellers include DFW Capital Partners, Iroquois Capital Group and PineBridge Investments.

In a deal valued at $2.4 Billion, Envision Healthcare Corp. is selling American Medical Response (AMR) to KKR.  AMR is the nation's largest provider of ambulance services.  The proposed acquisition offers synergy with an KKR's existing portfolio company.  KKR's Air Medical Group Holdings is a leading provider of emergency air medical transportation services to individuals with critical health issues or injuries.  >>Read more

Friday, June 09, 2017

It's All About the Metrics

 "Without data, you are just another person with an opinion. " 
~ W. Edwards Deming 

While it's fine to have an opinion & keen insight.…owners are expected to share more when their business is For Sale.  After all, it’s the numbers that tell the story that prospective buyers want to hear.

Thanks to technology, there are numerous tools to measure metrics and neatly populate data into worksheets, scorecards or dashboards. While the data may visually look good, is it helping you run a business that will impress buyers down the road?

Not all metrics are created equal; Nor does one-size-fit all...
Some performance metrics are meaningful across industries, e.g.: revenue, EBITDA, customer mix, etc.  Others are not. Choosing the right metrics for your business is key.  The most useful ones are simple to track, easy to understand and actionable. 

Whether you're preparing for a sale or not - Focus on business goals that are critical or need improvement.  Measure only what's important relative to your goals.  Avoid the trap of too much data and "Analysis Paralysis".

Relevant but Not Easy
Consider a common example of a metric...BMI.  The index devised by a European in the 1830's is familiar to many but seldom computed without a calculator or Fitbit.  The required conversion of weight (pounds to kilograms) and height (inches to meters) is just too cumbersome for most of us on this side of the Atlantic.     

Relevant, Easy, Actionable  
We work with many healthcare industry clients and have found a few specific metrics helpful in assessing ongoing performance.  If your business is healthcare-related, have you considered adding the following to your analysis...
  • Revenue* per FTE: This is a quick way to assess how much money your business generates per full-time employee.  Track it monthly and yearly - it's easy to do and will alert you to both good and bad trends.
  • Revenue* per revenue-generating employee: Most businesses have 2 types of employees - those providing billable services & those providing business support.  It's an easy to track metric that can signal the need to ramp up employee productivity.  
  • Payroll hours/visit:  Another productivity metric which involves hours of payroll paid in a pay period divided by total patients seen (same pay period).  In a practice not doing complex procedures, the result should range between 1.5 - 2 hours per visit.  (Include salaried and hourly staff in computation.)
*Cash collected 

Have a question about the right metrics for your business?  Don't hesitate to call us, we can help...610-527-8400.

Thursday, May 25, 2017

Don't Plan to Fail....

Unfortunately, procrastination may be all too common among business owners... NOT a good trait for those considering selling.  The Exit Planning Institute (EPI) estimates that 4.5 million businesses will go to market over the next decade.  However, only 20 - 30% may actually be sold according to Christopher Snider, EPI CEO.  Recent surveys of business owners by EPI reveal that many have little to no exit planning in place. 
If you fail to plan, you are planning to fail.
Platinum Financial Planning; jmarkmiller.net

Selling is not a snap decision nor will it happen in a snap...or, at all if you consider the input from EPI's Snider. It's a decision that requires ample thought...

Michael R. Lewis, a retired corporate executive and entrepreneur, suggests that owners consider some of the following questions before initiating the sale process. 
  1. What will you do after the sale?
  2. Can you replace the income from your business?
  3. Does your business enjoy a healthy advantage in the marketplace?
  4. Who are potential buyers?
  5. What are possible obstacles to a sale?
  6. Are you able to run the business and participate in the sale process?
Start the planning now... the experts suggest business owners start preparing for a sale 3-5 years from the desired exit date.  Conducting internal due diligence is one approach to assessing how prepared an owner is for the big event.  And, keep Ben Franklin's quote in mind... to spur you into action.

Wednesday, May 03, 2017

Investor Feels Good about Urgent Care

CityMD, the New York metro area urgent care provider, will soon go under the Warburg Pincus banner.  The private equity firm is planning to acquire a majority stake in the healthcare services provider.

Good Feeling about UC
Warburg's interest is understandable.  CityMD, founded by Dr. Richard Park in 2010, has experienced impressive growth.  Dr. Park grew the operation from a single clinic to 68 locations serving more than 1 million patients annually (through a merger and start-ups). CityMD has a heavy presence in the New York metro area - the City, Long Island, northern New Jersey.  Also, through a partnership with CHI Franciscan Health, CityMD operates clinics in Washington state.

With today's preference for convenience and as high-deductible health plan become more commonplace, patients will likely seek out urgent care centers to address certain health needs.  Many clinics have already expanded their service menu to appeal to patients. In fact, Becker's Hospital Review reports that "adults under age 30 are more likely to visit an urgent care center than a primary care physician."  Increased use of urgent care centers bodes well for the growth of the sector.



Friday, April 14, 2017

IVY Goes WEST

West Physical Therapy logoWe're pleased to announce that West Physical Therapy is
now part of the growing Ivy Rehab family. 

Dave Franklin, Ivy's President of Midwest Operations, noted 
"West Physical Therapy is an excellent partner 
as we grow our footprint in the Midwest..."

Congratulations to our client and West PT owner, Julie West, and the staff in the Chicago area offices.

Are you Ready to Sell?

Are you Ready? warning sign
One of our clients paid us a compliment...and it MADE OUR DAY!

 MT Consulting was instrumental in evaluating and packaging our business to create overall value.  Your ability to keep us focused, prepare us for due diligence, and lead us through the process was critical for us to have a successful transaction. This expertise resulted in a great deal, and great relationships moving forward..."   
  ~ Owners of a Large, Multi-site Service Business 

So, what helped to prepare our client for a smooth, successful transaction?  We believe it was our commitment and their buy-in to Seller Due Diligence.  

What is Seller Due Diligence?...  an outside analysis of a Seller’s financial and operational info conducted from a buyer’s perspective prior to marketing a business. (We're experts at performing seller due diligence. In fact, it's a core service provided for our clients.)

During the process, our goal is to verify the accuracy of key business data as well as uncover, correct and/or address any potential buyer concerns upfront.  Also, we often identify adjustments that positively impact business profit. In general, the transparency is appreciated by buyers and works to diffuse issues that could delay or derail a transaction.

Benefits of Seller Due Diligence
  • Increased Buyer Confidence
  • No Surprises during "buyer due diligence"
  • Prepared & Well-packed Data for "buyer due diligence"
  • Accelerated Closing
  • Enhanced Offer
We’ve been involved in M&A for over 25 years – on the buyer and seller side.  While there are a number of factors that attract a buyer, buttoned-up and prepared sellers are likely to get the greatest attention and a better deal.  Reach out if You're Ready to Sell and would like to better position your business for the best deal.