In an article for Modern Healthcare, Bass, Berry & Sims attorney Angela Humphreys discussed potential roadblocks related to mergers in the healthcare industry. With added pressure to cut costs, increase revenue or add new services, healthcare executives may rush into merger talks before doing thorough due diligence.
As Angela speculates, “In some cases, hospital and health system executives are prematurely signing a letter of intent to get under the hood and take a look rather than diligently forming a detailed offer. ‘You open yourself to a lot of scrutiny and criticism if you haven’t brought in your stakeholders. In some cases, it can make a deal dead on arrival.'”
While a variety of issues may halt a merger, Angela points out “It’s typically more around other issues related to expected synergies and a gap in valuation” that will prevent a merger from happening.
The full article, “Providers Jeopardize Deals as They Rush into M&A Talks,” was published by Modern Healthcare on April 20, 2019, and is available online.