Tag: Kevin Palamara
Mergers & Acquisitions: Have transparent, upfront conversations
December 6, 2022Kevin Palamara
Q. What steps should I be taking to most effectively position my company to go through an M&A process?
A. Foremost, ensuring organizational alignment before approaching the market is paramount in setting yourself up for a successful process. It’s critical to achieve stakeholder agreement in terms of transaction goals, deal structure (e.g., majority vs. minority investment, strategic vs. private equity partner), timeline and valuation expectations to minimize the likelihood of...
Mergers & Acquisitions: Assess benefits, drawbacks
November 9, 2022Kevin Palamara
Q. Is pursuing an M&A transaction process the right decision for my organization?
A. Typical motivations to begin an M&A process are to generate owner liquidity, mitigate personal financial risk, raise capital to fund growth initiatives (e.g., acquisitions, new service offerings, etc.), gain strategic resources and infrastructure capabilities, or take a step back from the business to retire or explore other ventures.
M&A processes can also create opportunities to partner with like-minded...
Mergers & Acquisitions: Assess interest rates, recessionary fears
October 12, 2022Kevin Palamara
Q. How will rising interest rates affect the M&A market for HME businesses?
A. As the Federal Reserve has raised interest rates to help combat inflation, private equity sponsors who utilize debt to finance a portion of their acquisitions have been faced with higher borrowing costs. Debt providers typically price loans off a certain benchmark rate (e.g., LIBOR, federal funds rate, etc.), and as those benchmark rates have risen, the cost of debt to finance acquisitions has increased alongside...
Mergers & Acquisitions: Understand the current landscape
September 7, 2022Kevin Palamara
Q. How has the M&A environment for HME providers shifted over time?
A. Following the introduction of competitive bidding in the early 2010s, M&A activity in the HME sector grounded to a halt, as reimbursement was cut drastically. However, as the marginal impact of each subsequent round of competitive bidding lessened and the reimbursement environment stabilized, investors demonstrated a renewed interest in HME providers, driven by market tailwinds that have positioned the sector for growth....