When you go to sell your healthcare business, you shouldn’t just settle on any buyer. You need to make sure that the buyer is a good, quality fit for you and your business. While this search can feel overwhelming, there are a few strategies you can use to identify and qualify candidates.
Decide what kind of buyer you want first
There are two main types of buyers for healthcare businesses: strategic and financial.
- Strategic buyers are existing healthcare businesses that are looking to grow. They want to acquire your business in order to add services or to expand to different locations.
- Financial buyers are looking to buy your business for a short period and then will try to resell later for a profit.
If you want the highest possible sales price, you should look for strategic buyers. Financial buyers don’t have the ability to pay above market rates whereas strategic buyers might, especially if they believe your business would add gains through synergy. If you want to preserve your company culture, you have a better chance with financial buyers. They are less likely to make major changes to your business.
For more information about types of buyers, check out our article, Financial vs. Strategic Buyers- What’s the Difference?
To find buyers, you need to get the word out that you’re interested in selling. In the past, you could post ads in trade publications, contact larger companies in your field, or work with a business broker/investment banker to access their list of potential buyers. All these methods could still work but DealZumo has created an easier, more effective way to search.
The online database is a place for buyers and sellers of healthcare businesses to come together. You can search through our database to find buyers interested in buying your type of business. Potential buyers need explain their background and deal history before they can reach out to you. The process is also confidential and all potential buyers need to sign an NDA. This way you can research discretely without your employees finding out.
Search completed deals
If you look over completed deals, you can get an idea what your business will sell for and also identify active buyers in your field. Large buyers may be interested in multiple deals as the healthcare industry continues to consolidate. Also if they completed one deal successfully, that’s a good sign they know what they are doing and are reasonable to work with.
The DealZumo TransactionStream records healthcare deals that have recently closed. This is a good place to conduct your deal research to determine the current valuation multiples.
Research a buyer’s deal history
When you consider a prospective buyer, check if they have made any deals in the past. If they have, see whether the deals were in your field of healthcare. Any quality buyer has to understand your field or at least have the appropriate medical advisors to assist them. This way they can appreciate the value of your business and will have a better chance of running your business after they take over.
Trust your instincts to qualify buyers
For your deal to be a success, you need to get along well with the buyer. If you feel like there is a personality mismatch, it may be a good idea to walk away even if they look good on paper. You will need to work closely with the buyer for months to complete the deal. If something doesn’t feel right at the beginning, it will only get worse as you go further along the process.
By following this advice, you can find plenty of candidates who you can then narrow down to the very best match for your business.