Summary of 2017 American Academy of Dermatology Conference Panel: Exit Planning for Dermatologists
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Clint Bundy, Managing Director with Bundy Group, was asked to sit on a panel for the 2017 American Academy of Dermatology conference. The panel was focused on Mergers & Acquisitions trends within the Dermatology segment. It was a lively session that included thoughts from the following panelists:
- Clint Bundy (Managing Director; Bundy Group; Investment Bank)
- Tom Ferkovic (Managing Director – Medic Management; Practice Management)
- Rick Cooper (Member, McDonald Hopkins LLC; Chair of National Healthcare Practice Group)
- Matt Leavitt (Dermatologist and CEO – Advanced Dermatology & Cosmetic Surgery)
- Pat McElgunn – (Dermatologist and Partner – Piedmont Plastic Surgery & Dermatology)
- Marc Darst (Dermatologist and Owner – Darst Dermatology) (Moderator)
The attendance was strong, indicating the emerging importance of this topic for dermatology practice owners. The audience largely included practice owners considering next steps in succession and / or growth planning, heard detailed insights on a range of topics.
Highlights of the panel included:
- How do you prepare practices to be acquired?
Tom Ferkovic discussed the important aspects of practice operations that should be addressed in order for the practice to continue running smoothly. Tom emphasized that the practice should mitigate any issues with scheduling, billing and / or patient flow. Clint Bundy stressed the importance of maintaining quality financials and information on the practice (example – number of patients served; breakdown of revenue by offering; etc.)
- Buyer / Investor considerations when acquiring a practice?
Pat and Matt, executives with organizations that have a track record of acquisitions, discussed the importance of a target’s culture and its compatibility with the buyer’s organization. Dermatology is a talent-dependent business, and it is critical that the values of two organizations fit. Rick Cooper provided insights into the legal and logistical hurdles that have to be accomplished by both a buyer and a seller in order to successfully close a transaction. Mr. Cooper also recommended steps which practices should take now to prepare for a future transaction to be properly structured and to identify and correct problems that might otherwise surface in due diligence.
- Determining the value of a practice?
Clint Bundy highlighted the concept of the market determining the value of a practice. For an owner to obtain market value for a practice, the dermatologist is advised to run a process that attracts multiple buyers. Clint also indicated that certain financial fundamentals are critical to determining valuation, including understanding a practice’s Earnings Before Interest Expense, Taxes and Depreciation / Amortization Expense (EBITDA). Pat and Matt indicated that cultural, geographic and target company financials were all aspects that they took into consideration when submitting an offer for a dermatology acquisition.
Marc Darst efficiently managed the panelists through the topics and provided his own insights. There were several detailed questions from the audience, which the panelists were able to offer thoughts on.
The Bundy Group team appreciated the opportunity to serve on a panel with such an esteemed group from the Dermatology industry.
