Merger and acquisition deals can result in benefits for all involved. When it comes to deals in the healthcare industry, these deals can ease administrative burdens and expand technological innovations, ultimately helping to improve patient care.
But finding the right deal is not easy; even when a deal seems promising, various hurdles can present issues in closing the deal.
What are some common hurdles to healthcare merger and acquisition deals?
One potential issue is government concern. In some cases, the government will step in and try to block a proposed deal, claiming it would harm healthy market competition. This can lead to allegations of a potential monopoly. The cost of fighting against the move can be high and many have chosen to forgo a deal instead of take on the government.
Going head-to-head with the Federal Trade Commission (FTC) to fight allegations of a potential monopoly is just one concern. These deals have also fallen apart after due diligence revealed ongoing disputes over allegations of federal regulation violations or even a failure of the two cultures to merge well after the deal is complete.
How can I remove these hurdles?
Business leaders are wise to promptly conduct due diligence before moving forward with these deals. Taking the time to dig into a target acquisition’s financials and compliance history, in addition to getting a clear understanding of how the acquisition would help poise your facility for financial growth, can reduce the risk of these issues arising during the final stages of negotiations and mitigate the potential for surprises after the deal is finalized.
Attorney John Rivas is responsible for this communication.