How a corporate law attorney can help maximize results after a merger and acquisition
If you want your firm to gain a competitive edge or perhaps expand into a new market, you might consider pursuing a merger and acquisition (M&A). Our corporate law attorneys know that an M&A can reap financial benefits. Your firm may receive cash out of the deal. The consolidation may represent a smart investment strategy.
But while such transactions can lead to positive outcomes, some companies may experience a financial downturn after an M&A. Analysis by Deloitte finds this to be the case with some hospital mergers. According to a report from Deloitte and the Healthcare Financial Management Association, the two organizations examined information about finances for 750 hospitals that went through M&As between 2004 and 2015.
While you might not run a hospital, the analysis provides valuable lessons for any business leader considering an M&A.
Over the past 10 years, M&A activity involving hospitals has ticked upward. Buyers and sellers see such transactions as a way “to create operational, strategic and financial value,” according to the report.
The analysis, however, found that some acquired hospitals generally did not experience higher operating margins immediately following the transaction. The financial downturn experienced by these health care facilities lasted for two years after the M&A.
Proper integration planning and execution: a key success factor
Is it fair to conclude that hospital executives should steer clear of M&As, based on this analysis? Not at all. The Deloitte analysis finds that the M&A experience was not the same for each hospital. In fact, some acquired hospitals saw financial gains if the transactions were completed with proper integration planning and execution. Hospitals that were acquired generally performed better when executives started with explicit goals, the report finds.
In order to achieve better financial rewards, it’s important to work with a corporate law attorney who can ensure the transaction is completed properly. The number of hospital mergers continues to increase due to “financial, market, competitive and regulatory forces,” according to the Deloitte report.
If you’re considering consolidation, you should start by consulting with an experienced law firm like Brewer & Pritchard. We can guide you through the process to ensure you meet your financial goals. As the Deloitte report concludes, you will need to develop a strong strategic vision.
When you work with attorneys who have decades of corporate law experience, you will see the difference through actual results. We represent private and public companies looking to consolidate. We handle a range of legal issues related to M&As. We can help draft and review your letter of intent, purchase agreements and other ancillary agreements.
If you are considering a merger and acquisition, contact Brewer & Pritchard P.C. today for a consultation. Call 800-445-8710 or complete the online inquiry form. We want to help you achieve your goals and maximize your results.
Not certified by the Texas Board of Legal Specialization