Middle-Market M&A - Can the good times last? Four factors shaping M&A in the second half of 2019
By: John Reiss and Gregory Pryor
Positive drivers of M&A, including the strength of the US economy, the availability of financing and the strategic imperative to consolidate or transform for many corporates have underpinned transactions.
Buying a business is a complex proposition. There are dozens of considerations, tangible and intangible, that must be taken into account when evaluating whether a transaction is a good fit. Due diligence is the process by which buyers attempt to dig into all these factors before signing off on a deal.
Size of Company - the larger the company, typically the larger the EBITDA
Management - executive team in place with tangible P&L success in ARM/RCM
Growth & Sustainability - EBITDA & revenues are sustainable and growing
Concentration of Clients - the higher concentration of clients, the more likely an Earnout and/or valuation reduction
Scalable - systems/infrastructure in place and scalable to support growth
Market niche - certain niches now preferred are Healthcare RCM, Government & Student Loans
ARM/RCM - Recent Industry Transactions
Transworld Systems Inc.
Credit Bureau of Lancaster County, Inc.'s collection division portfolio
Provider of ARM Services
Provides software solution for RCM firms
Incline Equity Partners
Brown & Joseph
Provides commercial accounts receivable management services primarily focused on insurance end markets
Transworld System Inc.
NCC Business Services
Provides collection solutions for the property management and multi-housing industries
Transworld Systems Inc.
Altisource Portfolio Solutions S.A.'s Financial Service Business
Provider of collections, customer relationship management, and call center outsourcing
Canada Pension Plan Investment Board and Bain Capital
RCM provider to health systems, hospitals and physicians offices
LaSalle Capital Group, Inc.
Professional Recovery Consultants
Provides ARM services
Aspirion Health Resources (Aquiline)
Specialized Healthcare Partners
Medical claims processor focusing on denied and complex claims
New Mountain Capital
Provider of software of revenue recovery for healthcare, ARM and government markets
Marion Financial Corp. is a merger and acquisition advisory firm based in Houston, Texas. Marion Financial has had an industry focus in the Accounts Receivable Management (ARM) and Revenue Cycle Management (RCM) sectors since 1995.