Healthcare M&A – Creating Value, Synergies, and Sales

About the Episode

Michael Roub joins us in a discussion focused on the healthcare market. He shares his insights as an executive and strategic consultant with significant corporate development, M&A, operations, and capital raising experience. Michael is the Managing Partner and Founder of Inflection 360. He has spent two decades providing strategic direction and leadership to healthcare practices, business owners, and management teams. In this episode, we take a deep dive into the healthcare market, including considerations around acquisitions, looking at synergies, financing sources, and the future of the healthcare M&A market. 

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In this Episode

9:30 Can EBITDA margins be as high as 40% for some healthcare practices?
10:00 Overview of healthcare services M&A
12:40 Why has the scalability of healthcare businesses increased so much in recent years?
13:40 The current state of the healthcare market
16:20 What are the benefits of a medical group?
18:00 How are larger healthcare acquisitions financed?
18:50 Example of a healthcare acquisition — revenue, margins, EBITDA, multiple
20:25 How do private equity groups structure their relationships with healthcare practices?
22:30 How does an equity rollover work?
26:00 What role does a private equity firm prefer the owners to play post-acquisition?
29:50 Salary expectations for ownership post-acquisition
32:45 Are private equity firms the primary source of capital in the healthcare market? How common is debt financing?
33:45 How accessible is debt for independent healthcare operators?
34:55 How do changes in the regulatory environment impact the healthcare industry and the attractiveness of acquisitions?
38:40 The future of the healthcare industry and its impact on healthcare M&A
40:00 How common is cross-border M&A in the healthcare space?
41:45 How is equity used to incentivize senior leaders in healthcare businesses?
45:00 How is a typical private equity M&A healthcare transaction structured?
47:00 Drag-along rights
49:00 How do minority partners achieve liquidity?
51:00 How do private equity group timeframes affect healthcare businesses and the industry?
56:20 What improvements do PE firms typically make to improve the business?
57:30 How common is it to sell to a competitor vs. a private equity firm?
59:40 Do you prefer working the sell-side or buy-side better?
1:00:30 How much additional value can the seller create by preparing their business for sale?
1:05:50 What’s your advice to owners of healthcare practices looking to sell?

Learn More About This Episode

EBITDA | Definition, Formula & Example – A Complete Guide

Meet Our Guest

Michael Roub

Michael Roub

Managing Partner and Founder of Inflection 360

Michael Roub is a Managing Partner and Founder of Inflection 360. He has spent the past two decades providing strategic direction and leadership to healthcare practices, business owners, and management teams.

His expertise is focused on early-stage growth businesses, healthcare practices, and major corporations where he specializes in acquisitions, handling deal sourcing and pipeline development, negotiation, and transaction execution. He provides strategic oversight to support the needs of emerging healthcare groups and small businesses looking to develop and execute on a strategic plan.

Michael began his career in investment banking, where he worked with numerous major corporate clients on equity and debt capital raising, mergers and acquisitions, and corporate restructuring engagements. Michael also was a finance executive at a Silicon Valley start-up prior to entering the healthcare sector in 2002.

Michael received his undergraduate degree from the Wharton School of Business and his MBA from the University of Chicago Booth School of Business.

Proven executive and strategic consultant with significant corporate development, M&A, operations, and capital raising experience.

Location Location: Los Angeles, California

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