FORT
WORTH, Texas, July 24,
2024 /PRNewswire/ -- As healthcare-specific
merger and acquisition (M&A) advisors, VERTESS
(https://vertess.com/) has been asked frequently by healthcare
business owners "How is the market in 2024?" and "Is now a good
time to sell my company?" We understand that most owners believe
they must wait until the market tea leaves reveal the optimal time
to sell to secure the best price. In response, we can speak to
significant macro conditions, such as interest rate activity,
inflation shifts, and global events. Those all will generally have
an impact on prices of transacted companies. However, the far more
critical indicator for when a sale is optimal will always be when
the owner is ready to move on to whatever is next in
life.
At VERTESS, we recognize that owners are likely the most
important person to the business. They are its biggest cheerleader.
They have invested more in it than anyone else, so they typically
will make the biggest and greatest impact on the business. If
owners wait to try to time the market or take advantage of some
other perceived opportunity, they run the risk of souring on the
business and becoming burned out or disenfranchised. If that
happens, the business is going to suffer, and that will likely lead
to a decline in sales price.
Of course, interest rates continue to be a substantial issue
affecting healthcare businesses. They are high and the Fed isn't
likely to start reductions until the end of this year or the
beginning of 2025 due to sticky inflation and a strong labor
market. If an owner wants to get a bank loan for their business,
they're looking at 10-plus percent. How has the market responded to
rising interest rates? Bank loan activity has slowed, and
people are deploying more equity. Private equity firms are maybe
doing one or two turns of debt equity, with the rest of their
payment coming out of pocket. Two years ago, when interest rates
were about half of what they are now, these firms might do half a
deal in debt.
Buyers find a way to evolve to what's happening in the market
and buy the businesses they want to acquire. Buyers, especially
strategics, bake acquisitions into their growth strategies. It's
their "buy-and-build" strategy. Buyers know they're going to grow
organically every year at X rate, and then they plan for inorganic
growth at a certain rate, which is accomplished through
acquisitions. Inorganic growth is typically identical to, if not
larger than, organic growth rate.
Regardless of the market today or what's projected over the next
12-plus months, buyers are going to set acquisition mandates and
work to achieve them. Buyers need to buy companies to scale their
businesses. It's part of part of the fabric of their operations and
what they're used to doing — and that's not going to change,
regardless of what's happening nationally and internationally.
"Ultimately, owners should know what's happening in the market
as this can affect matters like budgeting, staffing, and
purchasing. But when it comes to selling your company, don't let
what is happening in the market influence your plans. The risks of
doing so far outweigh any potential benefits," cautions VERTESS
Managing Director/Partner Bradley Smith. "If you own a successful
business, you should be able to find a buyer and one that offers
you a good, fair price, regardless of what's happening in the
market. The key to a successful sale is to run a proper process
that results in all interested buyers — and the right buyers —
coming together simultaneously and making their best offers. That's
how you'll know you're getting the best price for your
company."
For more information, please contact Vaughne Glennie at 380788@email4pr.com or
+1.520.395.0244.
About VERTESS
VERTESS is an international healthcare-focused Mergers &
Acquisitions (M&A) advisory firm with expertise spanning
diverse healthcare and human service verticals, ranging from
behavioral health and intellectual/developmental disabilities to
DME, pharmacies, home care/hospice, urgent care, life sciences, and
other specialized services and products. Each VERTESS Managing
Director has had executive experience in either launching or
managing and ultimately successfully exiting a healthcare
company.
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SOURCE Vertess Healthcare Advisors