Due Diligence Surfaces Add-On Strategy for Specialized Healthcare Practice
The Deal:
Mid-market Private Equity firm acquired a specialized healthcare practice with numerous regional clinics, Ambulatory Surgical Center (ASC)s, and diagnostic offices. Value Creation Agenda included add-on companies with complementary specialties and diverse geographies. Add-on acquisition Target was identified.
Key pre-close concerns included: Managed Services Organization (MSO) strategy and initiatives required to integrate / migrate appropriate IT systems to include: PM/EHR, Finance, HR, and Marketing systems
Deal Thesis:
- Accretive growth through expanded geographical operations and increases in customer base
- Cost savings through systems consolidation, operational leverage and process efficiency
- Build out a Managed Services Organization (MSO) to operate appropriate shared services
Sabio Results:
Sabio’s extensive technology diligence identified over 60 IT applications / services in use by Target in the areas of Finance, HR, Marketing, Operations, and Clinical / Practice Management. While these capabilities were mostly fit-for-purpose, a number of gaps and concerns were identified to include: ability to scale, insufficient policies and practices, lack of automation in certain business processes, and use of internally hosted platforms.
In addition to providing a critical analysis of Target operations / IT systems, Sabio developed a comprehensive MSO Value Chain focused on identifying which business process/clusters should be consolidated into a centralized MSO and which should remain localized w/in a market or geography. This model then formed the basis of an overall MSO strategic plan.
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