Healthcare documentation companies provide services involved in documenting the patient encounter while revenue cycle management firms provide services that use that documentation to generate revenue to the healthcare provider.
- Identify which healthcare services your company provides
Transcription, electronic healthcare record (EHR,) scribes, coding, clinical documentation improvement and revenue cycle management?
- Engage the services of a business sales, mergers & acquisitions firm specializing in healthcare documentation and or revenue cycle management businesses.
Many business owners feel most comfortable going on a referral from a trusted source. Absent of such a source, you can begin by searching the web for Mu0026A advisors or business brokers that specialize in HIM/RCM. For smaller businesses, say under 3M in revenue, the Wall Street Journal’s website, bizbuysell is an excellent place to search for brokers who sell the type of business you own. From this link, click on the pull down, u0022More Filtersu0022, and fill only the keyword field with the type of service you provide, such as transcription, medical coding, billing, etc. Kruse Acquisitions, LLC is a leading provider of these type of brokerage services.
- Set up a data room for the proposed transaction
Data rooms are secure online data repositories where files can be securely stored and accessed by approved parties. Initially the data room will serve as a repository of files your broker will need to prepare the business for sale. Once all of the files have been reviewed and used to produce a confidential information memorandum on the business, the data room becomes the hosting site of key marketing and financial materials for prospective buyers to review. Here’s sample login and data room pages at Kruse Acquisitions, LLC:
- Estimate the business’ enterprise value.
Businesses are frequently marketed with no specific asking price, requiring rather that prospective buyers make their own determination of value and to submit those values as part of the offer process. But then why value the business if you’re not going to specify an asking price? Firstly because you and your broker will typically need to agree on a specific price in order for the engagement contract with your broker to be legally valid. Secondly, the two of you will want to be in agreement as to your estimate of the business’ value. If you’re miles apart on valuation, better to know that before you begin. Although an outside firm could do the valuation, typically this is done by the broker as part of the engagement process. Here’s a sample letter assessing the value of a business to be sold.
- Populate the data room, prepare & publish CIM.
Once your advisor has been engaged, they will send you a document request list of the information they will need to properly prepare the data room and issue the estimate of value outlined in the previous step. Initially the data room will be used just by you and your advisor to share confidential documents. The requested documents will be used by your advisor to prepare the Confidential Information Memorandum (CIM,) a document designed to offer interested parties a comprehensive look at your business. Once the CIM is done, it will be published to the data room, awaiting review by interested parties. These interested parties will find out about the opportunity through the next step, The Teaser. But first check out the table of contents below to see what is in a typical CIM. We’ve posted a full CIM sample at our website, that you are welcome to download and review.
- Prepare and publish the Teaser
The teaser, also known as a blind profile, is an abstract of the CIM. While the CIM might be 50 pages in length, the teaser is more like 1-3 pages. The teaser or blind profile is so called because it is designed to provide enough information to tease interest but not enough (thus blind) to identify the company. The teaser is a marketing piece sent to a select audience of potential buyers of your business identified by your advisor. Those expressing interest from the teaser and deemed by your advisor to be qualified for such a purchase, are invited to sign a confidentiality agreement and view the CIM in the secure data room.