The healthcare industry, particularly the home health and hospice sector, is experiencing a dynamic shift with an increasing number of transactions. Recent reports show 20 upcoming transactions that will generate over $12 billion in merger and acquisition activity in this market during the first quarter of 2024. This is the highest reported number since before the pandemic.
Entering into healthcare transactions requires careful planning and consideration of various factors that can impact both parties. This can include:
- Regulatory compliance: Ensure the business complies with all healthcare regulations and laws.
- Financial health: Examine financial statements and cash flow to assess the business’s profitability and stability.
These considerations are fundamental for both buyers and sellers to ensure a fair and legally compliant transaction.
Strategies for a successful transaction
There are certain strategies that can help to better ensure a successful transaction for those involved in buying or selling a home health agency or hospice. Some recommended steps to achieve this goal include:
- Due diligence: Conduct thorough investigations into all aspects of the business, including legal, financial, and operational.
- Professional advice: Engage with healthcare transaction experts, such as lawyers and financial advisors, who understand the specific challenges of the healthcare industry.
It is important not to understate these two straightforward tips. Although they seem like common sense, a failure to take either seriously can spell disaster for a proposed deal. The vast majority of deals that fail are a result of poor due diligence. Having thorough due diligence completed by a team of trusted and experienced professionals can mitigate this risk and better ensure a smooth transition for all parties involved in the transaction.
Attorney John Rivas is responsible for this communication.
