Selling a Medical Practice: Business Broker Listing Agreement Basics

Business Broker Listing Agreement

Business Broker Listing AgreementBy: Amanda Bhikhari

Many physician groups and health care companies will enter the market at some point to sell their business. In the rare case, the selling group will already have a buyer who is ready and willing to pay and close on the business sale. More often than not however, most sellers will utilize the services of a business broker to help find a suitable buyer, and will compensate the broker on a commission basis upon closing.  Unlike real estate closings, whereby the main concern is the title of the property being conveyed, medical practice sales require much more detailed representation on all aspects of the business, including but not limited to, real property, existing contracts, existing patients, and medical equipment.

Before signing a business broker listing agreement, ensure that the following points are considered to avoid potential pitfalls:Continue reading

Resurgence of Medical Practice Acquisitions in Private Equity

telemedicine contract

medical practice saleBy: Jeff Cohen

Private money (e.g. private equity) is back chasing those selling medical practices and medical business acquisitions.  This time around it is very different from similar activity in the 90s.  Back then, the movement was public companies aggregating gross income dollars, which for a time drove stock prices.  Today’s private money buyers are looking to maximize profitability through achieving efficiency and aggregating large groups for leverage and the development of new income streams.  Though stock (in the form of warrants and options or stock itself) if often on the table, it doesn’t have to be.  Buyers are doing all cash deals, albeit to some degree on an earnings basis.  If you want the full price, you have to remain involved and do what you can to maintain revenues and perhaps even drive them up.

Physicians especially have to know what they’re dealing with and then have at least a basic understanding of the issues that will drive these deals.  To begin with, “private equity” simply means private investors (typically a group that pools their capital) that buy a portion or all of a company.  Their investments are usually much larger than venture capital firm deals.  They are not publicly traded entities.  What do they want?  To invest money in mature businesses, grow a company’s profitability and then “flip” their ownership to another buyer, typically in three to five years form their launch date.  In contrast, venture capital firms usually invest in start-ups, buy 100% of the company and require control.Continue reading