The BBS Connect Newsletter is an extension of our BBS Connect Operating Partner Database, which connects middle-market healthcare-focused private equity funds with experienced executives. Each installment will introduce you to the impressive and insightful professionals that are part of our network.

In this quarter’s edition, we are pleased to feature insights from Anna-Gene O’Neal and Paula Lovell. Anna-Gene O’Neal is a Director of the Universal Health Group, an Investment Consortium headquartered in Miami, Florida, and has served in executive roles at HCA, Brookdale Senior Living and Alive Hospice. Paula Lovell is the Founder of Lovell Communications, a national public relations and crisis management firm that has provided strategic counsel to publicly traded companies, not-for-profit systems, early-stage and mature healthcare companies for more than 30 years.

Featured Q&As:

Anna-Gene O’Neal – Innovative Healthcare Executive and Board Director

What is the first thing you evaluate when considering an operating partner role with a business?

First and foremost, I need to be certain that my passion aligns with the mission and vision of the business and that the strategy makes sense. This is followed almost immediately by a comfort level with the senior executive team and the culture they are choosing to create. A strong mission, vision, and strategy combined with a great leadership team is virtually always a recipe for success.

When thinking about successful partnerships with investors or potential targets, what are some of the key attributes that come to mind?

It is imperative to have aligned goals and expectations as well as some history in the space. Further, when joining as an operating partner, it is critical to understand how the investors are defining the operating partner role for a specific business: strategic support, operational efficiency, change management, industry guidance or perhaps a combination of all.

In your experience, how do you resolve a difference in strategic views with your investors and/or potential target companies?

It all begins with mutual respect and communication. Should there be differences, it is critical to discuss openly and understand the differing views. This should be followed up with a very thorough discussion of well-thought-out data, analytics and opportunities to support each perspective. Reasonably, committed partners would then learn from each other and be able to reach a consensus for the best path forward.

What are the three most important things about being an operating partner/board member?

  • Know the expectations of my role. This is still a team sport.
  • Listening cannot be overstated to be a good partner.
  • Be Bold. It is critical to think big and challenge leaders (in a positive way) and be the catalyst to ignite something unique and great.

Aside from revenue and growth, what is the most important intangible for a successful business?

Leadership culture is key. It is critical to have a solid transparent partnership between the leadership and board with the goal of being agile and opportunistic. The leadership team should have a culture of willingness and openness to be both challenged and supported. A strong culture lends itself to growth of human capital, which is essential for growth and scale.

In 10 words or less, describe the role of the Operating Partner.

Listen, challenge, mentor, vision, encourage and support.

Paula Lovell – Founder, Lovell Communications

Aside from revenue and growth, what is the most important intangible for a successful business?

Arguably, the most important intangible for a successful business is its reputation. Reputation is earned, not bought; and it takes daily commitment from the top of an organization to gain the kind of trust and confidence that keeps a company in good stead with its stakeholders during times of crises, challenges, or changes.

Businesses will inevitably make mistakes, suffer from negative market or environmental influences, or face any number of workplace and financial challenges. It’s the company that has created active relationships and invested in candid communications with its constituents (and has proven time and again that it has a solid moral compass) that will fare well during a catastrophe. Companies that have consciously focused on building a solid reputation as a business that demonstrates sensitivity, responsibility, and responsiveness to all its audiences, can recover in relatively short order from an inadvertent mishap or even a very distasteful event.

It is difficult to measure the value of a good corporate reputation. Until you need it.

What will M&A look like in the next 12-18 months for healthcare?

There are several factors that will, undoubtedly, make 2022 an interesting year in terms of healthcare mergers & acquisitions. Although the industry M&A activity slowed in 2020 during the COVID cautions, it picked back up during 2021 when there were about 3,100 deals closed for a combined $592.9 billion (Pitchbook 2021 Annual Global M&A Report). I am not sure the activity is sustainable during the last half or quarter of 2022, however.

Some experts believe the Federal Reserve may raise rates yet again this year, making capital more expensive. It’s unclear (but certainly possible) that the Fed’s money supply tightening may delay some transactions.

Add to that the continued, and seemingly unsolvable, labor shortage in all sectors as well as supply chain issues, and we may have a situation where M&A is not as robust as we might have thought it would be when we looked at it even as recently as four to six months ago.

That being said, I am personally interested in seeing what happens in the medical and healthcare tech areas as well as home care. Every business is scrambling to find technology solutions to labor issues and continued increases in oil/gas prices.  Also, I believe that reimbursement for various forms for care in the home or non-traditional healthcare settings is going to become more and more favorable.

Bottom line, I think pure M&A deals may slow a bit toward the end of 2022, but we may see more strategic partners and operating partners as part of the healthcare sector’s growth solution.

In 10 words or less, describe the role of the Operating Partner.

Uses experience to grow revenues or guide through changes/crises.

Operating Partner Database

The Bass, Berry & Sims Healthcare Private Equity Team is proud to maintain the BBS Connect Operating Partner Database. This valuable resource is intended to connect middle-market healthcare-focused private equity funds with highly experienced operating partners, independent directors, management executives and consultants available to drive operational value and growth for portfolio companies. Our database covers executives from across the healthcare spectrum with experience from start-ups to the largest public or private organizations. Private equity funds are able to curate, with our assistance, customized, confidential searches for matches that meet specific needs.