Within the complicated setting of healthcare mergers and acquisitions (M&A), the appropriate choice of strategic partner is essential to success. Healthcare M&A advisors are important in assisting organizations to analyze the potential partners to guarantee that they align in terms of values, goals, and operations.
Explore how healthcare M&A advisors assist in the evaluation process
Why healthcare M&A advisors are crucial in evaluating strategic partners
Healthcare M&A advisors contribute expertise to the evaluation, which is a specialized knowledge of financial/operational/regulatory factors of the potential partnership. Organizations are directed to find an ally that will hasten growth, lower risk and add lasting value. This is why their participation is critical:
- Deep industry knowledge. Expertise specific to the industry enables an advisor to identify the most promising potential partners.
- Objective analysis. These choices ensure that valuable decisions are made based on proven facts, rather than biased opinions.
- Financial expertise. Advisors assist in raising the questions concerning the financial status of prospective partners, their stability and the capacity to maintain long term relationships.
- Risk assessment. Healthcare M&A advisors help identify potential hazards, such as operational inefficiencies or compliance issues, that could impact the alliance’s success.
- Strategic alignment. The partner should have a common vision and strategy with the organization to foster successful partnering.
How healthcare M&A advisors evaluate strategic partners
Healthcare M&A advisors also have a methodology to strategic partner evaluation. The major steps they follow are the following ones:
- Define strategic goals. Advisors will assist in setting clear strategic objectives, i.e. growth objectives, geographic expansion, or cost reduction, in order to fit in with potential partners.
- Conduct due diligence. They have extensive due diligence to evaluate financial, operational as well as cultural compatibility of the prospective partners.
- Evaluate market positioning. Advisors evaluate the market performance of the prospective partners in order to know their competitive capabilities, clientele and reputation in the market.
- Check operational efficiency. They consider the working efficiency of possible partners, analyze the processes and systems, as well as the management of the working force to be integrated properly.
- Review regulatory compliance. Healthcare M&A consultants also evaluate the compliance level of the potential partners to the regulatory standards and guarantee the compliance with healthcare regulations and limit legal liability.
Steps to take when evaluating strategic healthcare partners
In order to successfully assess the potential healthcare partners, the following step-by-step method will help:
- Conduct market research. Conduct research on the position the potential partner holds in the industry, its market share, reputation and competitive advantage.
- Assess financial viability. Check the financial status of the partner, the review of balance sheets, profit margins, and the future growth prospects.
- Examine operational capabilities. Evaluate the business strengths and weaknesses of the partner with priority on the following areas: patient care, technology, and efficiency.
- Evaluate cultural compatibility. Know the culture of the organization that you are about to deal with, and make sure it does not conflict with the culture of your own company because this is likely to cause problems in the integration.
- Ensure compliance. Ensure that the prospective partner complies with all applicable healthcare laws, such as HIPAA, accreditation and licensing laws.
Finally
The healthcare M&A advisors ensure the success of mergers and acquisitions by guaranteeing proper evaluation of strategic partners. In the case of a strategic partner, going into a deal with a seasoned advisor may be the difference between getting what you want in terms of accomplishing your organizational objectives.