By Bradley M Smith, ATP, CM&AA
Volume 2 Issue 9, April 28, 2015
Today, private equity groups (PEGs) have a growing presence as buyers of lower middle market healthcare companies. Why? They see the continuing expansion and diversification of healthcare opportunities, ranging from a local group of urgent care centers with wellness options to an array of senior living services with exceptional life quality. PEGs have increasingly moved “downstream” to healthcare companies with annual adjusted EBITDA as low as $500,000, which are regarded as “tuck ins” to existing operating platforms.
Why would a seller of a healthcare company want to consider a PEG as a buyer? Here are three good reasons:
With these “whys” in mind, here are some practical “hows” to make your healthcare business more attractive to a PEG:
If you take these practical steps, there is huge value for your healthcare business, even if you don’t ultimately transact with a PEG buyer. There is inherent value in any situation when you focus on the future.
For over 20 years, Brad has held a number of significant executive positions including founding Lone Star Scooters, which offered medical equipment and franchise opportunities across the country, Lone Star Bio Medical, a diversified DME, pharmacy, health IT, and home health care company, and BMS Consulting, where he has provided strategic analysis and M+A intermediary services to executives in the healthcare industry. In addition, he is a regular columnist for HomeCare magazine and HME News, where he focuses on healthcare marketplace trends and innovative business strategies for the principals of healthcare companies. At VERTESS, Brad is a Managing Director and Partner with considerable expertise in HME/DME, home health care, hospice, pharmacy, medical devices, health IT, and related healthcare verticals in the US and internationally.