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Considering Selling or Buying a Healthcare Services Business?

May 10, 2022
Est read time: 2 minutes

Buying or selling a healthcare business can be a complicated process. In addition to traditional contractual issues, you must also be aware of specific issues exclusive to healthcare businesses. The following are four of the issues you should take into consideration when purchasing or selling a healthcare business:

  1. Type of Sale. What am I selling or purchasing? Am I purchasing or selling assets, liabilities, stocks, shares, or membership interests in the business? It is common for purchasers to want to only buy the business's assets whereas sellers want to transfer their liabilities as well. Making sure you understand what you are interested in buying or selling ensures that the parties are not blindsided during the transaction. 
  2. Value. How much is the business worth? The starting point, as with the valuation of most businesses, is typically what comparable sales have taken place for a similar type of business in the same geographical area. 
  3. Due Diligence.How much research is required to ensure that the transaction is a beneficial one? This is the most important and time-consuming step. Due diligence includes but is not limited to consulting with a qualified appraiser who understands how to properly value a healthcare business. Further, consulting with an experienced healthcare attorney to determine the current medical licensure needs of the business and the status of those licenses. Due diligence includes understanding why is the owner selling the business. Further, it is ensuring that you and the other party have adequate financing. Due diligence is likely the most important step when considering purchasing or selling a business. 
  1. Verification of State, Federal Regulatory Compliance. Is the business registered as the appropriate state business entity and is the business compliant with the Stark Law, Anti-Kickback Statutes, HIPAA, etc.? As a seller, you must ensure that your “house is in order.” This means making sure your records are up to date, and that the business is in good operational and financial standing. Healthcare businesses are highly regulated. As a prospective buyer, you must ensure that the business complies with all licensure requirements and is operating under a license that has not expired and is not subject to restrictions. Each state has requirements for entities that conduct business within its state. It is important to ensure that the business you are considering purchasing is registered as the appropriate entity. 

Preparing for a Buy/Sell

All these questions warrant consultation with an attorney with experience in structuring healthcare entity transactions. To speak with an experienced healthcare lawyer who understands how to negotiate and plan for a sale or purchase of a healthcare business, contact Howell, Buchan & Strong Attorneys at Law for a free consultation.

Have questions about buy/sell agreements or contracts? Contact the law firm of Howell, Buchan & Strong at 850-877-7776 to set up a FREE, no-obligation consultation. Our firm represents licensed professionals statewide. 

Orlando (407) 717-1773 | Tallahassee (850) 877-7776 | Tampa (813) 833-6726 | Sarasota (941) 779-4348

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