Mike Moran of American Healthcare Capital appears in Hospice News article.
“When it comes to diligence that in particular is usually a very virtual process. It typically starts with the quality of earnings,” Moran said. “A financial firm is usually hired by the buyer to come in and vet the financials of the company. When we get beyond that the process typically will evolve into clinical and legal diligence.”
Hospice M&A Must Adapt to a Virtual World
Deals used to be sealed with handshakes and ink on a dotted line, but COVID-19 has turned these old-school practices into risky propositions. With little opportunity for travel or face-to-face meetings, the COVID-19 pandemic has impacted the ways hospice providers do business when it comes to mergers and acquisitions.
Hospice M&A is striding forward at an accelerating pace in 2020 even as the nation’s workforce goes virtual. Hospices comprised nearly 70% of acquisition targets in the home-based health care sector in the second quarter of 2020, the market intelligence firm Irving Levin Associates reported. But even though transactions are closing, providers and investors have had to navigate some troubled waters.
“I would estimate about 50% of our management meetings (buyer/seller meetings) are now done through Zoom. We’re also doing hybrid management meetings, where some folks may be able to meet in person and those who can’t Zoom in to a laptop,” said Cory Mertz, managing partner of the M&A advisory firm Mertz Taggart. “While in some cases, I think this will enable us to all to be more efficient with our time, in the case of management meetings, it can be hard to put a transaction together without the parties meeting face to face. It’s so important that buyers and sellers get comfortable with one another.”