Merger & Acquisition Services
& Company specializes in coordinating all elements of the merger &
acquisition process. Our clients remain in control of the decision
process, while Nemzoff & Company coordinates and manages the project team
and leads the negotiating efforts. One of the greatest challenges
facing the health care industry today is dealing with the process of market
consolidation. Competitive forces, as well as increased managed care
penetration have created a situation that is causing many organizations to
question their long-term viability as stand-alone hospitals. For many
hospital boards or management teams, a merger, acquisition or divestiture
will be the most important decision they will make regarding their
organization. Because of the complexity and size of such transactions,
the risks to your organization can be substantial.
There are six options
available to most 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. However, it is our experience
that a significant amount of time and effort is not necessary to review
these options in great detail. Most of our clients know what they need to
do, they simply do not know how to complete the process. After a high level review of the advantages and disadvantages of each
option, it is usually fairly obvious as to which of the options should be
selected. In fact, our options assessment procedures usually do not involve
a recommendation to the board, although we can provide such guidance. Our
role is primarily to assist the board in understanding the ramifications,
both positive and negative of each option.
Divestiture Planning & Implementation
Selling a hospital is
probably one of the most difficult decisions a hospital board will ever
make. Issues of employee layoffs, 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
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 described, as “mergers” are actually 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.
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
If we can be assistance to you, please contact us at 215.862.4404. We look forward to speaking with you.