Frequently Asked Questions:

​What is my business worth? 

Many factors determine the value of your healthcare services business, including revenue and profitability trends, margin profile, size, location, service mix, payor mix, referral diversity and future earnings risk. 

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How much does it cost to have a professional value my business? 

Mertz Taggart does not charge a few to give you an opinion of the value of your business, with no obligation for future services. 

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When is the ideal time to sell my healthcare services business? 

There are three forces at work that determine the ideal time to sell your company:

1) Are you ready? Do you have a plan in place for post-transaction life?; 

2) How is the M&A marketplace? Like anything else, the marketplace cycles, and it’s best to sell when the marketplace is strong, but is often difficult to time; 

3) Where is the company in its life cycle? Ideally it is growing, all things equal, including revenue and profitability, a growing company will likely yield a higher value than a company that is declining. There is always a market for strong, well-managed healthcare services businesses. 

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How long does it take to typically sell a company? 

The time frame varies by company, but it typically takes 6-8 months to locate the right buyer, complete due diligence, negotiate the purchase agreement, and close the sale. 

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How do I sell my company without my employees, referral sources, or competition finding out?

Maintaining confidentiality is paramount to a successful transaction, and will need to be managed throughout the process. We are sensitive to the issue and will work with you to maintain this, from the initial contact with buyers, to conducting due diligence, to key employee retention. A strong confidentiality agreement is important, but not enough. 

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Do I need to hire an M&A intermediary to sell my business? 

Selling a company is a time-consuming process that requires diligent oversight. Most owners know very little about the advisor’s role in a transaction. A good M&A intermediary will be thoughtful in their buyer outreach, lead the confidential, highly coordinated marketing effort, provide the right information to the right buyers at the right time, coordinate management discussions, manage competitive offers, negotiate on your behalf, and help ensure your ideal buyer is selected (ideally with backup offers, for good measure). From there, you should expect your advisor will be instrumental in driving the process to closing. This will include managing each party, when necessary, working capital negotiations, resolving issues, often together with your legal counsel. The advisor should also provide post-transaction support, including working capital true-up. 

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Should I ask my accountant or attorney to find a buyer for my company?

We highly recommend including both an experienced M&A attorney and accountant as part of your deal team. However, if you are interested in finding your ideal buyer or investor, and compelling them to close on their best offer, we believe the only way to achieve this is by running a highly-coordinated and competitive process including the best and most likely suitors for your company. This is the only way you can have comfort found the right buyer and right deal.

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If I sign an engagement agreement with you, what is my obligation? 

You are never required to accept an offer and have total discretion with regard to accepting, counter-offering, or rejecting any offer that is presented. 

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What size companies do you represent? 

Typically, we work with companies that have an expected selling price between $5 million and $100 million. 

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What are buyers looking for in a healthcare services business?​

While each buyer has their own desirability criteria, most are looking for business they can acquire and run with very little transition or payer clawback risk. This often includes having strong leadership in place, a diverse referral and patient/client base, ideally growing revenue, and IT/management infrastructure can sustain growth. In healthcare services, reimbursement risk is always present, and varies by industry, payor, and over time. 

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What are the tax consequences of selling my business?

Tax implications depend on the structure of the sale and your corporate entity, Typically, LLCs and S-Corporations have more favorable tax treatment than C-Corporations, and an equity transaction is more favorable than an asset transaction. It is important to consult a CPA and an M&A attorney experienced in healthcare transactions.

What is Adjusted EBITDA?

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a calculation that revises traditional EBITDA to reflect market-value owner compensation while excluding the impact of nonrecurring revenue and expenses. Adjusted EBITDA is a very subjective number, and can vary significantly based on who is evaluating the company. Seller’s EBITDA is not usually equal to buyer’s EBITDA. A competent M&A advisor will present the most favorable adjusted EBITDA, without sacrificing credibility with the buyer or investor.

Will I have to stay on after the sale? If so, how long? ​

Fortunately, you have a big say in this. When we take a company to market, it’s with our client’s objectives in mind. We will present the right buyers according to your objectives, including your post-closing involvement.

Where will the closing take place? 

This depends on the buyer and their attorneys. Most closings today are handled electronically, with documents exchanged via email and signed electronically. Once all signatures are collected and closing conditions are met, funds are wired to the seller’s bank account.

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Additionally, we segmented Frequently Asked Questions (FAQs) by industry, so that you can easily find exactly what you are looking for. Click the industry you are interested in from the list below, and get informed! ​

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Home Care | Home Health | Hospice

Addiction Treatment | IDD/Autism | Mental Health

Infusion Therapy | Ambulatory Surgery Centers

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