On Demand - Private Equity Deal Considerations: Business and Legal Considerations In a Private Equity Transaction-Webinar Recording

Video Transcription

Video Summary

In this video, Justin Hand and Abe Embodged from West Cove Partners and Dean Gould from Dykema discuss the process of private equity transactions in the cardiovascular space. They explain that private equity investment in healthcare, particularly in physician practices, has been growing rapidly in recent years. They emphasize the importance of properly preparing for a transaction, including conducting a quality of earnings analysis and building a comprehensive information memorandum and virtual data room. They also discuss the two main options for physicians considering private equity partnerships: aligning with a private equity-backed strategic partnership or becoming a platform investment for a private equity firm entering the cardiology space. The speakers highlight key considerations such as board control, cash consideration, external expertise, equity appreciation, and access to capital when evaluating partnership options. They also stress the need for a thorough and efficient process, which involves executing non-disclosure agreements, distributing the information memorandum, and conducting due diligence. The legal aspects of the transaction, including compliance with the corporate practice of medicine and structuring the management services organization (MSO) , are addressed by Dean Gould. He explains that lawyers play a critical role in early preparation, negotiating the letter of intent and bid draft, conducting legal due diligence, and drafting key agreements such as the purchase agreement, equity documents, and employment agreements. Gould also emphasizes the importance of allocating risk in the purchase agreement, addressing restrictive covenants, and handling transition issues. He concludes by outlining the post-transaction phase, which includes managing the relationship with the buyer, potential second liquidity events, and opportunities for practice growth. The webinar concludes with a brief Q&A session, during which participants are invited to ask questions about the private equity transaction process.

Keywords

private equity transactions

cardiovascular space

healthcare

physician practices

quality of earnings analysis

information memorandum

virtual data room

private equity partnerships

due diligence

post-transaction phase