Are You Ready for the Next Level? Real Growth Starts After the Deal
In this episode, Paul Martin explores a powerful strategy, one where the biggest financial wins happen after the sale. Today's buyers are looking for leaders to grow with. If you're energized by what's next, and not ready to walk away, this might be your moment.
Full transcript
Generated from the episode audio and lightly edited for readability.
Hello and welcome to another episode of the Martin Rehab M&A Advisory. I'm Paul Martin, founder and president of Martin Healthcare Advisors. And what I want to talk to you about today is, are you ready for the next level? That's a question that I would have for you. Are you ready to take your business to the next level? And I think we're talking about something today that has really changed in the rehab M&A market. And that's who do buyers really want to partner with? And this may be a little bit of a spoiler alert, but it's not sellers that simply want to cash out and walk away.
What acquirers are looking for in this market is growthbinded owners who want to take their business to the next level and get rewarded for those efforts. You know, acquirers 20 years ago, they used to look for profitable companies. They could fold them in and run them. And years ago, they ran into declining performance because the owner would leave very soon after the acquisition occurred and they would lose over time the relationships that the owner built. They would lose over time the connection with staff that the owner had built.
And so today that's changed. They are today looking for leaders who want to stay in the game along with them. They want your help growing into new markets, keeping your culture, maintaining that positive culture that you've built over the years and then taking what we would call that next big leap to that next level along with them. You know in today's reality buyers want to know that you are in the biggest financial win for folks like you out there today come from selling a portion now of your company and that's a majority portion and then growing together with the acquirer and later on earning even more than in the initial sale that we were talking about.
So the new model is what we would call a partnership sale. You sell a controlling interest, but then you retain what we call rollover equity up into the new company and this new company is now owned by you in a minority position and the acquirer in a majority position. You stay on to lead the growth. And then when that bigger company sells down the road, you get a second and many times often larger payday than you got at the original closing. Sounds great, right? You know, buyers know that a big reason your business is successful and that is because of you.
And so they want you on board. It keeps the team engaged. It ensures a smooth integration and transition. It helps the business hit growth goals faster. And when that happens, everybody wins because the interests of you and the acquirer are aligned. I mean, think about that. If you sell and walk away, there's no alignment in the future for the acquirer. The structure that I'm describing. Look, it's not for someone that's looking to retire next month or you may have a health problem. That that's not the structure that you would be looking for in those situations.
This is for owners who still have a lot of energy, who know that their business has more room to grow, but they need either the right capital structure, the right systems, or the right support to get there. They can see clearly that next level, what it looks like, and they know some of the steps that they'll have to take to get there. And then you're going out and seeking the right acquirer for the steps that you want to take to get there. And look, if what I'm describing is you, the market is ready for you and the market is ready for your business.
You know, we talked about and I want to I want to mention again that the biggest upside in today's deals is rollover equity. And it's important that you understand what that means. It's selling a part of your business now, rolling the rest into a bigger growing platform. And when that company sells again or you're able to build in a predetermined time frame for the acquirer to buy you out of that rollover equity, your smaller piece at the beginning will be worth and should be worth a whole lot more at the end.
Let me give you a real life example. An owner we worked with many years ago just at the start of the partnership sale. They had 12 clinics. They sold 70% of the business. Got cash and a small note for that 70%. They stayed on and helped the business grow and owned a 30% portion of that business. So they had a 30% rollover equity. When that platform sold again, the remaining 30% equity that they were holding was worth more than the original 70% that they got at the closing initially.
That's how rehabilitation business owners are creating real wealth in this industry. So if you're tired and you just want out, this is not your path. And I will tell you there are opportunities to sell your business and ex exit after a short and a very smooth transition, but you will absolutely get a reduced value and there are less acquirers out there looking for those opportunities. We have to try to match up with where they have clinics and you become that add-on. But there won't be any upside on the other end in a deal like that.
If you still really love what you do and you're ready to take your business, as the title says, to the next level with the right partner, then this is your market and this is your time, just like the USA hockey team back in 1981. You know, here at Martin Healthcare Advisors, we are in this industry every single day. We help owners prepare for partnership deals like we've described in this video. We assess your business, identify what options you have, and then we connect you 100% confidentially with the right acquirers so that you can make the best choice for you, for your family, and for your business family for the future.
So, if you're ready to take that next level, click below and let's talk. I appreciate you all listening in today and have a great rest of your day. Have a great weekend and I look forward to talking to you in the very near future.
Want to talk about your own business?
Marlton, NJ 08053