Our approach for deal process
An introduction is usually made through an initial telephone call and a subsequent on-site meeting at the business owner’s corporate offices. The duration of this relationship-building period can be days, months or years, depending on the business owner’s timing and needs.
A confidentiality agreement is executed and the business owner forwards the company’s financials, which usually includes audited financial statements for the last three years. Discussions with the business owner continue with regard to deal structure, purchase price, and strategic goals. A typical term sheet includes items other than price, such as a description of timing, the diligence process, and an exclusivity period.
During these initial negotiations, we discuss long term objectives and goals. Most of our investments involve partnering with the owners and/or management team. We prefer this partnership structure, however, in some cases we will consider a total buyout. Our investments generally include long term equity and monetary incentives for key management personnel.
We work with lawyers, accountants and advisors to better understand a prospective partner’s business and the competitive landscape. We visit their office(s), and speak with select members of their management team, customers and vendors. All of these activities help us to evaluate the business and their potential growth opportunities.
To fund each transaction, we draw from our committed funds and wire the money into our new partner’s account.
We leave the daily management of the business to the management team while helping to monitor progress and implement value creation initiatives from a big-picture perspective. Our investment team serves as board members and we leverage our industry expertise, deal origination activities and business relationships to help positively impact and grow the business.
We work together to identify, contact and acquire add-on acquisitions. Typically, we build out the sales and accounting infrastructure during the first few years of ownership.
DW Healthcare Partners has a great deal of flexibility on the holding period, and there is no predetermined disposition date. Typically, the partners hold an interest in the company for three to seven years.