Gary W. Herschman, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Newark office, was interviewed on the Wealth Planning for the Modern Physician podcast, in the episode titled “Medical Practice Mergers & Acquisitions,” with host David B. Mandell.
Following is an excerpt:
Listen in as David chats with nationally recognized healthcare mergers and acquisitions (M&A) attorney Gary Herschman. Gary begins by describing his firm and practice and then gives some statistics in terms of the number of M&A deals in the medical practice space.
David and Gary then dive into the reasons why a medical practice might consider merging with another practice, becoming an acquirer or being acquired. They then discuss how investors value medical practices, when to involve an attorney, and key success factors. Finally, Gary explains why an accurate understanding of the deals that are out there benefits physicians, even if they decide not to move forward.
Topics include:
- What Gary’s practice and law firm focuses on and their experience
- The growth in the number of medical practice M&A deals over the past few years
- 3 reasons why a practice might consider an M&A transaction:
- Monetization
- Protecting against future uncertainties
- Economies of scale
- How investors look at the value of the practice – the importance of free cash flow
- The value of a corporate structure and ancillaries
- When to involve an attorney, if a practice is considering a deal
- The importance of negotiating the letter of intent (LOI) even if it is non-binding
- The crucial factor of cultural fit between the parties
- Why “hybrid issues” like EMR or medical equipment can be challenging
- The value of working with an investment banker
- Gary’s key takeaway: spending the time and some money to clearly understand the deal(s) that are out there – before deciding to jump in. The analogy of “informed consent.”
