“Tell Me,
What is it you plan to do with your
One
Wild and Precious Life?”
During the past few years, M&A has become the most prevalent vehicle for realizing value throughout the global healthcare industry. In special situations, the IPO remains as a reasonable alternative for a Company to raise capital in an efficient – albeit uncertain – manner. And, occasionally, a company’s public stock may be used as currency in pursuit of growth objectives… (provided, however, that the Company’s stock is well-supported on Wall Street and the Company remains successful in balancing the pitfalls of a long-term, value oriented strategy that is continually subjected to the tyrannyof quarter-over-quarter expectations).
For most healthcare companies, the public markets have long since vanished as an effective means for investors to realize their gains, for management to build wealth, and for partners to achieve value. In fact, whether on the “Buy Side” or the “Sell Side”, the importance of M&A to a Company’s success is on par with that of daily functions such as sales, manufacturing, and R&D.
Yet, along with the increased importance of M&A, the discipline of M&A is also vital. And to each successful transaction, equal parts of ART and SCIENCE must be applied…
The “Science” of M&A is all about ensuring a Perfect Process, Every Time. Sellers want to know what their Companies are worth, who is likely to buy them, for how much, and how long will it take? Buyers want to know who's competing with them, how much they might have pay, and how they're going to ensure they win the deal at a fair price? The process is made vastly more difficult by the lack of good information surrounding most transactions. Who really knows the price of the last several deals or understands the rationale of potential buyers in order to have insights into their likely behavior?
The “Art” of M&A is all about asking “Why?”. Why is the Company for sale in the first place? Why is one buyer more qualified than another? Why is one buyer willing to pay more than another? Why is a seller taking so much time?
Because M&A is an extension of a company’s own unique strategy, the practice of M&A must be carried out by advisors that know the industry, and who are experienced in the strategic, operational, and financial nuances that dictate the Best Buyers and the Best Sellers at the Best Price.
