Is Healthcare Transactions Group, Inc. acting as a licensed real estate broker or agent?
Healthcare Transactions Group, Inc. is a corporation providing business consulting services as an intermediary and advisor in business mergers and acquisitions. As a consulting firm, we originate and facilitate transactions involving the sale, purchase, and valuation of business enterprises, rather than the real estate assets alone. We contract with each buyer or seller who decides to use our advisory and intermediary services and act as a consultant on their behalf. We are listed under Business Broker listings or as Mergers and Acquisitions Consultants in directories and Internet search engines. It is acknowledged and understood that Healthcare Transactions Group is explicitly and expressly not holding itself out as a real estate broker or another licensed agent as that term may be applicable under various jurisdictions throughout the United States. Healthcare Transactions Group considers itself a “boutique” Mergers and Acquisitions (M&A) intermediary firm. Sometimes the term “M&A Broker” is used in the private middle-market transactions arena. The term “M&A Broker” may be used by us without any licensure or registration, per the U.S. Securities and Exchange Commission private ruling, dated January 31, 2014.
How does Healthcare Transactions Group, Inc. get paid for its services?
How does the involvement of Healthcare Transactions Group improve the deal for a seller or buyer or improve the probability of the deal closing?
First, Healthcare Transactions Group is a specialized advisory firm dealing only in Healthcare transactions. Our principal has over 20 years of healthcare industry experience in both the public and private sectors. Healthcare deals are unique because of the reimbursement, regulatory and medical issues involved. Business value can change overnight with changes in reimbursement.
Thus, even if Healthcare Transactions Group does not act in an intermediary capacity for your transaction, Healthcare Transactions Group can help you by acting as your exclusive acquisitions and divestiture advisor in the following ways:
- Structuring the deal;
- Alerting you to potential reimbursement, operational, business and regulatory risks;
- Getting the best price;
- Uncovering hidden values;
- Formulating proforma income projections;
- Assisting you in your due diligence;
- Evaluating and negotiating the legal documents; and
- Directing the process to close the deal.
Healthcare Transactions group can help you reach a better deal from both an economic and legal perspective.
If I decide to sell my business, I would prefer to keep the decision confidential until contracts have been signed and I'm prepared to make an official announcement to staff. Can Healthcare Transactions Group, Inc. maintain this level of confidentiality and still be able to provide effective services?
Absolutely. The necessity of maintaining confidentiality is characteristic of all mergers and acquisitions activity. As appropriate, we suggest that the parties execute a Confidentiality Agreement. Alternative addresses and telephone numbers can be provided by the seller for contact purposes, and site visits by the potential buyer can be made as either mystery shops, or as insurance inspections or audits. Some owners find it helpful to inform one trusted employee of the negotiations, so that the person can act as an alternative contact. However, this is by no means required.
If I decided to sell my healthcare company or facility, what kind of information would I need to send to Healthcare Transactions Group, Inc. as an evaluation package?
The information requested varies somewhat based on the type of business, and you should contact us for a customized list. However, the most basic information needed to evaluate a facility or healthcare company is:
- Last Two Years’ Medicaid and Medicare Cost Reports
- Most Recent Rate Sheet Calculations and Private Charges
- Last Two Year-End Financial Statements, with statistical backup
- Current Year-to-Date Financial Statements, with statistical backup
- Description of Real Estate and Site, Age, Structure, etc.
- Detail of all corporate overhead charges and all compensation or other payments to owners or directors
- Most Recent License and Fire Safety Survey Results
- Insurance Loss Runs
How does Healthcare Transactions Group, Inc. present an opportunity to a buyer?
What happens after the Disclosure Letter is sent?
What are the general steps of the Acquisitions process?
Preliminary evaluation materials are collected and reviewed by potential buyer. The seller gathers the necessary evaluation materials regarding financial condition, ownership, operations, markets and history, and sends them to Healthcare Transactions Group, Inc. After an initial screening and assessment to determine preliminary feasibility and an appropriate match, Healthcare Transactions Group then forwards these materials to selected potential buyers, who have executed a Finder’s Fee Agreement (and in some cases, a Confidentiality Agreement) and received a disclosure letter. The potential buyer then reviews these materials.
Preliminary pricing and offer. If, after reviewing the evaluation materials, the potential buyer has a desire to acquire the facility or healthcare company, then they will present Healthcare Transactions Group, Inc. with an initial offer. Healthcare Transactions Group, Inc. then relays that offer to the owner, who evaluates it and decides whether to accept the initial offer. If the owner accepts the offer, the transaction proceeds to the next step. If the owner does not, then the owner suggests a counter offer, and Healthcare Transactions Group, Inc. facilitates counter-offering, or counter-offerings, as is sometimes the case, between the parties until a mutually acceptable figure is reached.
Letter of Intent. Once the initial offer of a set purchase price has been agreed upon, the parties execute a Letter of Intent, which sets forth the agreed upon purchase price and the basic terms of the final agreement, such as price, included and excluded assets, assumed and non-assumed liabilities, deposits, non-compete and exclusivity, due diligence requirements and Closing date. This enables the parties to ensure that they are “on the same page”, to come to agreement on the major issues and also allows the parties to move forward within a scheduled time frame to complete the final evaluations and the negotiation of the definitive terms and conditions of the Purchase and Sale Agreement. In lieu of negotiating a detailed Purchase and Sale Agreement, the Letter of Intent serves a useful purpose and can save the parties time and money if there is no agreement on the salient terms of the transaction. The process of negotiating and finalizing a Letter of Intent reveal the points of agreement, points for further discussion, points of no agreement and the “deal breakers” Healthcare Transactions Group facilitates this process by advising its client during the discussions that occur, by helping iron out the disagreements and by continuing to serve as the conduit of all documents and materials.
Due Diligence. After the Letter of Intent has been signed, the buyer needs to conduct a more thorough review of the financial and operational history of the facility or company and the markets in which it operates. Per the terms of the Letter of Intent, the owner will furnish the buyer with certain materials and allow on-site inspections and testing. The buyer will have access to the facility or company premises upon appropriate notice and within the scope of terms set forth in the Letter of Intent. At this time, some owners find it helpful to inform their staff of the negotiations, but others still prefer that the staff not be informed until closing is imminent. Either preference can be accommodated, as long as the terms are set forth clearly in the Letter of Intent and agreed to by both parties. At this point in the transaction, Healthcare Transactions Group, Inc. continues to serve as an intermediary to set up site visits, obtain required due diligence materials, set up conference calls and meetings, and to facilitate negotiation. During this time, applications are made for appropriate licensure transfers and other government permits.
Contract Negotiation and Closing. Assuming that the due diligence review turns up no material reason for the transaction not to occur, Healthcare Transactions Group then assists as the buyer and seller engage in final negotiation of the Purchase and Sale or Lease Agreement, hammering out the fine points of the transaction, and the terms of the definitive agreement, such as representations and warranties, indemnities, time frames and conditions to Closing. All of the original terms set forth in the Letter of Intent are refined and confirmed in the Purchase and Sale or Lease Agreement, and at closing, final title and deed are transferred and all payments are made as set forth in the agreements.
Strategic Advising + Transactional Guidance
At this time of unprecedented change and reimbursement uncertainty, if your organization is considering the sale of your nursing homes, skilled nursing facilities, assisted living facilities, home healthcare, hospice, behavioral health centers or medical specialty business, please contact us toll-free at 866-MERGERS. We guarantee effective and personalized representation at competitive cost.