Small Urgent Care Centers Have Bargaining Power, Too

Large healthcare organizations may have advantages when it comes to negotiating acquisitions of smaller urgent care centers, but with the right approach smaller operators can narrow the gap and do quite well for themselves. That’s the key message an article published in Becker’s Hospital Review. Quoting an expert from a mergers-and-acquisitions (M&A) advisory firm, the article offers the following five steps urgent care centers can take when negotiating:

1. Make time for preparation.That means fully evaluating the state of your business—eg, profitability and staff continuity; having relevant financial documents at your disposal; assessing the value of the business; form a transition group that includes a broker, accountant, attorney, and M&A advisor; and setting goals for moving forward.
2. Understand who you’re dealing with. Figuring what the prospective buyer will gain from owning your business—to meet demand in your neighbourhood, or to try to keep more patients within their system, for example, will help you pinpoint just how much they would value your assets.
3. Understand the key steps in the M&A process.An M & A advisor can help you through the six key phases (exploratory, data gathering, marketing, negotiation, due diligence and closing).Identify transaction terms. The highest selling price isn’t always the best deal. The type of transaction (ie, merger, stock purchase, cash purchase) and various contractual terms can affect the true value of the deal, as well.
4. Start out on the right foot. Often, the party that proposes numbers first sets the tone for negotiations. Come to the table knowing the deal you’d be comfortable taking and make your case at the outset. This includes understanding what terms you’ll be flexible with, as well as actual deal-breakers.