Few decisions are as significant for a community hospital as the decision to enter into a strategic affiliation, asset sale, merger, joint venture, or other dispositive transaction. But while the significance of such a decision cannot be overstated, the challenges of implementation – particularly for organizations without relevant transaction experience – cannot be understated. The following is a list of some of the key steps you should take when preparing for a potential transaction:
Designate a Leader and Build a Team. Identify and empower a project manager to take the lead on coordinating due diligence and transition preparation (not the CEO/CFO – they don’t have time to run the hospital, negotiate a transaction and lead the diligence effort). Generally, it is advantageous to appoint someone within the organization who is intimately familiar with the hospital and its resources. On the other hand, because a transaction will require substantially all of your project manager’s time and attention, some clients task counsel or other advisors to perform all portions of this function. You’ll also need to identify the key individuals with authority over each department, division, and business unit of the hospital to work with the project manager to ensure every detail and issue that arises during the transaction is addressed in a timely manner. It’s important that all members of the transaction team understand the project manager’s role in the transaction and maintain constant communication with him/her throughout the deal. Marshaling internal resources and getting organized is critical to a smooth transaction process.