To get the highest value for a middle-market healthcare business in today’s environment, it is important to look beyond the obvious buyers. Often the best acquirers are the ones that are not at the top of the initial target list. And often they are not even those that are directly in a seller’s market, either in their offerings or their geography.
When Brocair takes on a project, we spend a lot of time understanding our client’s industry ecosystem and considering possible buyers—including or ruling out proposed acquirers based on a number of quantitative and qualitative factors. In order to have a competitive process that elicits the best offers, it is critically important to start the marketing effort with the right audience already defined.
As we evaluate possible buyers we are always thinking about what their angle is likely to be, and try to understand how each acquirer will approach the opportunity—do we think they are likely to leave the management team in place and run the business as a stand-alone operation, or would they integrate this into their existing operations and look for synergies (that would grow revenue or increase profitability)?
Throughout a project we are always on the lookout for indications of a buyer’s motivation level, the valuation methodology they will employ, and other factors that will influence their go/no-go and valuation decisions. Ultimately, we believe that maintaining a strong focus on the buyer audience leads to significantly better terms and value for our clients.