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How Oaklyn Consulting Worked with Physicians Toward an M&A Solution – Or Not

We pride ourselves on helping clients reach a ‘no-deal’ solution when it’s right for them. That was the result of our recent work with a family medicine practice. Here’s the story in 5 steps:

  1. A practice was approached by a ‘roll-up’ practice which had recently acquired several similar doctor offices.
  2. After an initial conversation, the doctors and their lawyer asked us to help them organize their response to an information request that would lead to an offer to buy the practice.
  3. To help the doctors understand what they would be communicating to the potential acquirer, we gathered and analyzed all the financial and operational information requested by their suitor. And we did this with the information:
    • Showed the doctors what their practice would look like to a financially-minded acquiring practice.
    • Highlighted data that would create headlines for an acquiror — trends, risks, easy improvement opportunities.
    • Highlighted for the doctors how to distinguish their income as ‘professionals’ and as ‘owners’ of their practice.
    • Quantified the differences — good and bad — among each of the business scenarios practically available to them. In this case, the options were (1) sell to the roll-up practice; (2) sell to the local hospital; and (3) stay independent. This way, the doctors could tell a fair offer for their practice from an unfair one.
  4. We packaged and sent the information to the suitor, and while they were digesting the information, we engaged the doctors in a conversation about how they would make a decision when an offer came back. We discussed all the possible criteria for determining the future of their practice — individual needs, family needs, group needs, reputation, mission, taxes (with help from the practice accountant and lawyer), work environment, employees, each doctor’s health and productivity, etc.
  5. An offer came back from the suitor. It was fair — the financially-minded suitor thought so, we thought so, and the partners in the practice thought so. The doctors considered this offer and their other options. The doctors’ conclusion: “In light of this being a fair offer, we value our autonomy more than the money. We pass on the deal and want to stay independent.”

We helped the client better understand:

  • The practice as a business, as an investor would see it.
  • The strategic business choices available to them.
  • How the partners might make a decision together about the future of the practice.
  • How to consider all the relevant criteria, without pressure to do a deal or sell out.

If this story seems relevant to someone you know, please call.

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