Merger & Acquisition Services

Nemzoff & Company specializes in managing every aspect of the merger & acquisition process.  Our clients retain full control of the decision process, while Nemzoff & Company coordinates and manages the project team and leads the negotiating efforts to ensure a seamless process. With industry consolidation accelerating, hospitals must be strategic in their growth or restructuring. Our expertise helps institutions navigate this process with confidence and success.

Options Assessment Sell Side Transactions

There are six options available to most distressed acute care hospitals relative to mergers & acquisitions.  They can maintain the status quo, buy, sell, merge, joint venture or network.  We believe that it is important for an organization to fully understand the implications of each option.  While many firms conduct lengthy and expensive analyses of all of these options, our experience shows that most clients already know which direction they need to take—-they just need proven guidance on how to execute effectively. We provide timely high-level assessments that clarify the advantages and risks of each option, ensuring informed decision-making.

Divestiture Planning & Implementation Sell Side Transactions

Selling a hospital is probably one of the most difficult decisions a hospital board will ever make. Issues of employee retention, retention of management or perceived change of mission can be traumatic for a community and debilitating to day-to-day services. Our divestiture planning process focuses on three issues: confidentiality, rapid transaction closure, and minimal disruption of hospital operations.
Nemzoff & Company will prepare a confidential memorandum detailing key facts about the hospital; identify qualified buyers through our extensive database; coordinate the execution of confidentiality agreements; supervise the bidding process and develop the structure of the transaction. Our services also include a valuation analysis, and if required a fairness opinion.

Merger Services

One of the primary reasons why hospitals do not consolidate through the acquisition process is they cannot resolve the issue of who is to control the surviving entity.
Many consolidations often legally described, as “mergers” are functionally acquisitions because one of the two parties is clearly in control after completion of the transaction. The issues of “shared” control can be a sensitive one, and Nemzoff & Company is skilled at working through this important, and sometimes emotional, issue. Truth be told, there is no such thing as shared control, essentially a real 50/50 deal. In such a deal, the fact of the matter is that no one has control.

We also assist clients in avoiding some of the common mistakes made during merger activities, such as forming and staffing a parent company, guaranteeing everyone jobs and trying to keep both hospitals fully operational when consolidation of services is appropriate.

Nemzoff & Company assists hospital boards and senior management in developing a workable structure for merging hospitals when consolidation is obviously the best alternative. With years of experience in structuring the process, Nemzoff & Company is extremely effective in managing each step toward a successful consolidation.

It has been our experience over the past few years that many mergers are discussed but not completed. This has allowed the for-profit companies to acquire facilities that could have merged with other non-profits in order to help consolidate local markets, but did not. The primary cause for this situation is that non-profit management teams and boards will not give up or share control. Instead, they attempt to create elaborate organizational structures that are doomed to failure. Nemzoff & Company has been able to resolve this problem for many clients through their extensive expertise in this area.

Acquisition Services

There are many ways to assume control of another hospital. It can be done through a membership substitution, which is essentially a merger an acquisition of assets, or a long-term lease. The common theme for all these structures is that one hospital assumes control of another hospital and that requires the target hospital to give up control. There are many other structures that do not involve a hospital losing control, such as joint ventures, affiliations, partnerships, etc. But in almost every deal, if a distressed hospital is taken over by another hospital, and that hospital has to assume all of the liability for operating the target, they will have to assume control.

That does not mean the target facility will not be able to participate in what is going on. It does not mean they will not have input. It does not mean they will not have influence. But control is not a gray concept in the M&A business, and it is very important that if you are the surviving hospital entity, you absolutely need to have control and that means the target hospital you are talking to is going to have to give up control.

Probably the most important service that we provide to “buyside” clients is our ability to make sure that everyone understands the control issue on day one. There are hundreds of deals that never get done because this decision is kicked down the road and when it is finally addressed, someone walks away.

Our experience in advising clients on billions of dollars of transactions puts us in a very unique position. We are positioned to answer the two major questions that “buyers” have. Why should I buy this hospital? and How am I going to fix it? Why am I buying it is a strategic question. How are you going to fix it is why we advise a significant level of due diligence, which essentially serves as the foundation for the turnaround plan.

If we can be assistance to you, please contact us.  We look forward to speaking with you.