Under LOI for a Medical Practice in New Jersey

searcher profile

November 07, 2017

by a searcher from Morehouse College in New York, NY, USA

This morning, a seller signed my Letter of Intent for his multiple location pain management business, earning $2M EBITDA. We agreed to a $7.2M purchase price (3.6X multiple) with a 30% seller note. The Company generates 35% EBITDA margin, with no Medicaid or Medicare. The company is reimbursed exclusively through private insurance.  

This means I'm now in diligence, so I'm looking for recommendations to service providers who provide these services: Quality of Earnings, Operations & Insurance diligence, and working capital audits. Recommendations towards anyone with a specific bent towards healthcare diligence would be ideal.

On capital raising, I'm mostly good on the lending and equity side but I'm always open to having a conversation. Equity's in the area of $2M, targeting a 30% return and on the debt side, raising about $4M. By the way, I'll be in Chicago on Friday at Booth's Search Fund conference so folks interested in chatting, we can definitely catch up there! 

Any recommendations on the diligence side? 

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commentor profile
Reply by a lender
in Yorba Linda, CA, USA
Congratulations! I like Brandlin & Associates for Quality of Earnings. And if you are at all considering SBA as an option for financing, Live Oak Bank has funded over $2.2 billion in acquisition loans, understands and embraces the search fund model, and we also have a Healthcare team with great industry expertise. Our Healthcare team will have other industry specific vendors they can recommend. If you would like an intro to them, please send me a message. Good luck!
commentor profile
Reply by a professional
from Boston University in Las Vegas, NV, USA
Congratulations Bakari, on your LOI! I'm very happy for you, and it sounds like a great deal for you. I'd happily to recommend the folks at PKF O'Connor Davies (Jonathan Moore), who just completed my Due Diligence Study (they've got offices in NJ and NY that could service your need), and Equity Risk Partners (Josh Richman) for insurance and risk diligence. They performed mine as well. Send me an email with any additional specifics.
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