A Sponsor's Perspective on MSO Transactions with Physician Groups with Fritz Buerger
Below is an excerpt of the full interview conducted with Fritz Buerger. Download the PDF now for the full article.
How long is the average physician platform deal process from start to finish? What are the key phases and typical timelines for each phase?
The time spent preparing for a deal process can vary significantly because it is influenced by several factors. Typically, our clients
have an exciting growth story they want to share, so we want to make sure that story is easy for potential buyers to understand and analyze through their due diligence. That means we spend a lot of time on clinic expansion—including efforts to advance target acquisitions to the letter of intent (LOI) stage or develop the de novo playbook for opening new locations—and the quality of earnings (particularly when we need to transition from cashbased to accrual accounting).
The reason it takes so long is because it is crucial to get these right. For example, on the quality of earnings, extracting the right data and creating the right context isn’t easy, even with the best accounting firms. For acquisitions, physicians can underestimate the time involved in getting a deal done, especially when they are just beginning to pursue an M&A strategy. It is better to take time getting to an LOI because you don’t want a surprise during your sale process. Overall, I’ve seen physician groups and their advisors get ready in as quick as 90 days, and for some, it can take up to a year.
I encourage physicians and managers to focus on how they can get their practice to a better place than it would be on its own. That will be a different answer for everyone, but it usually means focusing on goals measured in terms of years and not weeks.
