Predicting Success in M&A
This week, Tanny and Paul sit down to discuss how Martin Healthcare Advisors can help you anticipate whether an acquirer will be a good match, and how you should react, no matter the prediction.
Full transcript
Generated from the episode audio and lightly edited for readability.
Hello, my name is Tanny Crawford. I am the director of business development for Martin Healthcare Advisors. Welcome to this episode of Paul Martin's Crucial Conversations called Predicting Success in M&A. Today we welcome back Mr. Paul Martin for another informative episode. Welcome Paul. Hello Tanny and hello audience. So Paul, not all mergers and acquisitions are perfect, right? There are some that have some issues here and there. So are there any elements that you use to predict the success of a merger or acquisition? We do. Some of it is objective, but much of it is subjective.
And I think that, you know, early on in conversations from our client to an acquirer, when the acquirer and our client have very clear combined strategic visions and goals, you know, and you and you can you can feel that in what we call our management meetings. That's when we bring potential acquirers to our clients to talk. And these are two three-hour meetings. And in those meetings, you can just feel when there's again a strategic alignment of visions and go of vision and goals. You know, I think another strong indicator of success is when you have very strong leadership on both sides.
So typically the acquirer will bring very strong sophisticated leadership. We always know on the side of our client when leadership is strong there's a much better chance that there's going to be success. So let's call that management alignment. And then we often hear from an acquirer what their integration process is going to look like. And when we have and can feel that being and see that being detailed out and that there will be very early and effective communication and a very detailed integration process, we know that has a great shot of being successful.
I hear that there's a high level of emotional intelligence involved in those meetings that you can kind of feel the synergy. That's fantastic. There is. There is. And you know what we try to do is we prepare our client for those meetings. So they don't go in without knowing what questions should they be asking and what questions will the acquirers be asking of them as well. And we role play and we go through that so that they're prepared for that. But it's also real. If it's not real, if it's not, you know, they're real personalities and they're real companies being shown, we have a shot at a mismatch and we don't want we don't want to take that risk.
No. And you want to add value to the whole situation to both sides, right? Absolutely. How do you measure that potential value that a merger acquisition could bring? Yeah. I mean that many times becomes objective when we can look at the operations and pro and financial projections of our client and that we see that there's going to be some synergies from the acquirer and our client. We can see what growth will be attained. Now in many cases we'll recommend to a client before going into the market to make those changes.
But there are just some things that an acquirer does very well and our client is ready to utilize the higher level of sophistication as well as higher level management talent in order to drive their business forward. You know, and also I think that, you know, when you take a very detailed look at what market expansion opportunities are available to our client and then there's a very specific buyer that can drive those expansion opportunities, that's also when we know there's going to be a really good fit.
Paul, can you give me a high level of what a market expansion opportunity might be? Absolutely. So very recently we had a company that had three clinics in one part of the state and an acquirer was looking at that they had three clinics on the other side of the state but our client had way more had many more relationships within that state because that's where they had grown their business. The acquirer had you know well over 200 clinics and they were just getting started in that state.
So what we were able to do in this case was the acquirer had the confidence in the local market knowledge of this partner and literally over five years they were able to triple in size. So the EPIDOT tripled over five years. And what was interesting about that story is that in year one, they only opened one new clinic. And I can remember our clients saying, you know, we're getting on the same page. We're starting to see the opportunities. And over the next few years, four years, they open two to three clinics per year.
And the rest is history. Well, that does sound like a very successful merger acquisition there. Paul, thank you for joining us today. Thank you for the information. And this has been great. Absolutely. Thank you, Tanny. And I want to thank you for joining us as well. And to everyone watching, if you'd like another conversation or some more information, click the link below and we'll talk.
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