Healthcare Mergers and Acquisitions Jargon, Part 2

• “Bandwidth” – buyer has ability to review and evaluate multiple deals

• Indemnity – What seller has to provide to stand behind statements represented and warranted in a sale contract

• MAC Provision – part of purchase contract that deals with material adverse events before closing

• “CHOW” – In healthcare industry, there is typically a licensure or change of ownership application process.

• Pro Forma – Financial Model of Projected Revenues and Expenses, incorporating buyer’s operating assumptions and plans often testing multiple scenarios.

• TLM – Trailing Twelve Months of Financial and Statistical Data

• Re-Trade –Buyer’s Renegotiating Purchase Price Reduction After Agreeing to Purchase at a Higher Price Buyer Signs Deal That They Don’t Intend to Honor. Bait and Switch

• Earn-Out – An arrangement in which sellers receives additional future payment, usually based on future earnings.

 

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