Merger and Acquisition – Physician Practices
October 16, 2015
The merger or acquisition of a physician practice is a complicated transaction. A process needs to be established that allows for both parties to reach a fair resolution. To complicate matters, there are issues at a federal and state level of “fair value” relative to the compensation paid to the physicians in the transaction.
The process that we see in the marketplace today that has been effective for both parties is as follows:
- Perform a due diligence review for both parties.
- Decide which business model is appropriate (i.e., acquisition, leasing or hybrid)
- Negotiate a compensation plan with the physicians.
- Set up a term sheet outlining key aspects of the business agreement.
- Set up a letter of intent and attach the term sheet.
- Finalize an employment or leasing agreement.
In this series of short videos, we summarize and describe the process and the various business models available in today’s marketplace. For more information about the process to negotiate a potential merger or acquisition of a physician practice, please click on the links below.