---------- Forwarded message ---------
From: Vaughne M Glennie <admin@vertess.com>
Date: Tue, Jul 30, 2019 at 1:18 PM
Subject: Is Your Healthcare Company Ready for Sale?
To: <stevescott@techacq.com>

Volume 6 Issue 15, July 30, 2019

Is Your Healthcare Company Ready for Sale?

by David Coit, DBA, CVA, CVGA, CM&AA, Director of Finance + Valuation

After years or decades building your healthcare company/practice, it's increasingly likely that you will find yourself thinking about the prospects of selling your company. Whether you have a formalized exit strategy or are taking a "seat-of-the-pants" approach when it comes to preparing for sale, you must be able to view your company from a buyer's perspective.

More specifically, you will want to understand the key "value drivers" of your company. These are the qualities prospective buyers are most interested in seeing and learning about. To gain a better understanding of how your company is performing — specifically concerning these value drivers — buyers will typically ask you the following questions:

Does your company have a history of consistent growth?
Is your company part of a growing sector?
Are you increasing your share of the market?
Have you created barriers to competition?
Are any of your customers/patients contractually committed?
Are any of your products or services unique and provide you with a competitive advantage?
Do you have a recognizable brand?
Is your company innovative?
Do you enjoy net margins greater than the industry average?
Do you have a diversified customer/patient base?
Do you have a diversified payer mix?
Are you using best practices for accounting and financial matters?
Is your company sustainable without you?
Are your products or services delivered in a systematic and process-driven manner?
Do you track key measures of customer/patient satisfaction?
Do you have a skilled leadership team that succeeds in meeting or exceeding your goals and objectives?
Does your company have the ability to attract, develop, and retain quality employees?
Are all of your company's legal matters in order?

If you find it difficult to confidently answer these questions, your company might not be ready to sell, or at least not sell at a price your desire. The good news is that, as George Sandmann of CoreValue notes, these holes in your operations are fixable.

The question you must answer is, "What am I doing to fix the holes in my operations?" If you intend to sell your company in the near or at least the not-so-distant future, don't delay. The healthcare M&A market is currently very active. Buyers are eagerly acquiring healthcare companies that create investor/buyer value. Company owners only have one opportunity to make a first impression to buyers. Will your first impression lead to a successful sale at the price you want for your company or will it leave you with long-term regrets? The work you put in today can significantly influence the reward you earn tomorrow.

If you would like to discuss this article personally, the value of your healthcare company/practice, or how to get the best price when you sell it, you can reach David at dcoit@vertess.com or 480.256.0978.