Home-based care leaders seeking to become buyers must familiarize themselves with the legal transaction lifecycle to avoid common pitfalls. The mergers & acquisition (M&A) transaction lifecycle typically includes three phases: strategy and sourcing, due diligence and execution, and integration. During due diligence and execution, legal counsel becomes involved, and this phase is critical for success.
Due diligence starts informally, with the seller sharing relevant information with the buyer. As the deal progresses, it becomes more formal, involving diligence request lists, management meetings, diligence calls and data rooms. Various types of diligence can take place, such as financial, legal, insurance, employee benefits, billing and coding claims review, and lender diligence. Home-based care companies should also be aware of the following: regulatory issues that can complicate transactions, the agency’s tax structure, and if operating under the franchise model what permissions are needed to sell.
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