Situation

An innovative provider of support services for hospitals and physician groups, this healthcare services company was founded in the late 1970s with what was then a new concept of outsourcing critical back office functions to relieve hospital staff and physicians of burdensome compliance requirements. The majority owners were at retirement age and desired an exit, but were lacking experience with that process. Their desire to rush the sales process backfired, as interested buyers used weaknesses to their advantage, and the board took the company off the market.

Solution

A NextLevel partner, as CFO and member of the Board, initiated an in-depth review of virtually every element of the company’s operations, policies, and records, then led the development and implementation of a plan to resolve all issue areas that might have represented value detractors for potential buyers. He put together a plan that included a punch list of imperatives that would reposition the company at a higher level of value. The plan included priorities like the following:

  • Closing redundant service centers
  • Reducing the document processing workforce by more than 60 percent
  • Outsourcing some support services to India, which led to higher productivity for significantly less cost
  • Updating the previously hierarchical organization to make reporting structures more flexible

The NextLevel partner then coordinated input from all of the senior management and personally wrote an offering memorandum for distribution, overseeing the due diligence process and working closely with attorneys to finalize all contract details.

Results

  • After two years of focusing on improvements, the organization was positioned to go back on the market with the right strategy and operating plans in place.
  • Their own internal due diligence paid off. The company was so attractive to buyers that it had more than doubled in value, selling for a more than 100% premium over its original valuation.

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