Our Process

We customize our approach based on our specific Client engagement.
These are the typical steps involved in our transaction process:

Step 1 – Data Gathering and Analysis

The process begins with comprehensive data gathering. We will provide a list of requested due diligence information and conduct interviews with physicians and management. Some items of interest include financial statements, billing system reports and various legal documents. Once relevant data has been collected, the analysis stage begins. Merritt will review and adjust financial statements to accurately reflect the practice’s value to an investor. Data is then integrated to produce a full and accurate picture of the opportunity and its future potential.

Step 2 – Merritt Due Diligence, Marketing Materials and Production of Confidential Information Memorandum

Merritt will produce marketing materials to inform investors about the opportunity in a comprehensive and attractive way. The Confidential Information Memorandum (CIM) is the primary marketing document. The CIM outlines the practice and its key personnel, operations, growth factors and financial performance. CIMs may be supported by select materials like basic financial statements. Prior to the transmission of a CIM, a “teaser” is developed. This is a one-page document that tells investors about the opportunity at a high level without disclosing identity. Investors can sign a legal confidentiality agreement or “Non-Disclosure Agreement” to receive the CIM and other confidential information.

Step 3 – Buyer List Development

Concurrent with Step 2, Merritt will create a list of qualified and interested prospective investors. The list is derived from prior purchasers with whom Merritt has experience, our extensive contract list and research on firms that have invested in a similar industry or opportunity. Note that processes such as these are not public, and only select investors are notified of the opportunity. Even then, outreach will not include the seller’s identity or any confidential information until an appropriate Non-Disclosure Agreement is signed.

Step 4 – Buyer Engagement

Initial outreach to buyers includes the Teaser and may be conducted via e-mail or telephone. Buyers may have initial questions about the opportunity to help confirm their interest.

If the prospective buyer wishes to receive more information, they must sign the Non-Disclosure Agreement. The CIM and supporting documents are then shared, which typically produces additional questions and conversation.

Step 5 – Letters of Intent

Since the process is highly structured, certain milestones will have “due dates” to help coordinate multiple interested parties. Letters of Intent (LOI) are an example of this and are typically due on a certain date after buyers have had a chance to respond to Merritt’s outreach and review of confidential materials. LOI will include key financial and non-financial terms. There will be questions, negotiations and other steps involved at this stage. The goal is to identify several top contenders among the buyer pool and advance them to the next stage of the process.

Step 6 – The Presentation and “Best and Final” Stage of Bidding

Once the pool of prospective Buyers is narrowed to three to five, Merritt has each present their offers to the Client (usually in one day). During these meetings, the Buyer will review their terms sheets and strategies for growth. We are then able to compare the terms they are offering, side by side. These meetings provide the Client with an opportunity to ask questions directly as well.

Once the offers are fully understood, we can negotiate key points of each and ask the Buyers for a Best and Final offer via a revised LOI. During this stage, a limited number of purchasers are given access to a more comprehensive “data room” where they can review additional, detailed information that can help them refine their offer.

Once the final LOI are received, the Client is in a position to make their selection of who has provided the best terms and would be the ideal long-term partner.

Once the determination is made, an LOI is executed.

Step 7 – Diligence

After the LOI is signed, Buyers will work to complete diligence on the transaction. This is an exercise to both 1) confirm the business is performing as expected, and 2) investigate key risk areas. Most Buyers will have a structured diligence process that is based on a central information request list. That list will include financial, legal, operational and other items of interest. Many Buyers outsource components of the diligence process to accounting firms, insurance and benefits firms as well as other experts.

Step 8 – Legal Documents and Closing

Based on the detailed LOI, attorneys for the Buyer and Seller will create and negotiate a series of legal documents as part of each transaction. Typically, the Seller’s attorney will draft the documents which are then reviewed and edited by the Buyer’s attorney. The documents are negotiated until a mutually acceptable outcome is reached. Once diligence and legal documents are complete, the deal is ready to close.

© 2018 Merritt Healthcare Advisors. All Rights Reserved.

*Principals of Merritt Healthcare (“Merritt”) acted in their capacity as registered representatives of Burch & Company, Inc. “(BCI”), member FINRA. Merritt principals are licensed investment banking agents of BCI. All services requiring a securities license are performed through BCI. BCI & Merritt are unaffiliated entities.