A physician practice has many moving pieces that ensure it operates efficiently and provides the best possible care. In preparation, a physician practice can focus on critical elements that are key areas of focus for valuation. These include financial performance, opportunities for growth and synergies and differentiation in the market.
1. Strong financial performance is demonstrated by:
- Consistently growing top-line performance year over year
- Implementing fundamental operational practices that are effective and efficient
- Demonstrating strong underlying profitability through the ability to consistently distribute excess profits to shareholders.
2. Opportunities for growth and synergy are demonstrated by:
- Possibility of adding additional ancillary service lines
- Showing operational similarities between your practice and potential investment partner
- Using similar technologies and software as those used by potential investment partners, or the ability to quickly adopt these tools.
3. Differentiation in the market is demonstrated by:
- Specialized focus/expertise that sets the practice apart from competitors
- Scarcity value which occurs when there’s a high demand but a lack of service providers in the region
- Strong patient base and referral network.
Download PDF: Physician practice M&A
Physician practices are frequently being approached by private equity firms. This bring about many questions for practices owners regarding what’s next for their practice and how to maximize value as they prepare.
How we can help?
KPMG Corporate Finance LLC’s healthcare services investment banking team understands that the decision to pursue a strategic partnership is a significant decision. We guide physician practice stakeholders through each step of the process, from deciding whether to pursue a partnership, and understanding the value drivers to executing a transaction.
We’re able to answer questions and provide you with objective insights on how to efficiently execute a deal that aligns with your goals and objectives.We understand the healthcarelandscape and how to differentiate your practice. We offer actionable insights and guidance while managing the transaction from start to finish. Our decades of transaction experience allow us to navigate complex transactions, our pulse on the dynamics within the healthcare industry help us maximize value, and our relationships with private equity sponsors and strategic buyers are critical for getting your practice in front of more interested parties.
If you would like to begin a discussion around what your options for a strategic partnership could look like, and to better understand how to maximize value during the process, please contact a member of our team.