Pinnacle’s team of accredited valuation professionals provide business valuation opinions to support transactions for mergers, acquisitions and joint ventures in the healthcare industry. Pinnacle can value the entire operating business and appraise individual components of the business including tangible assets such as fixed assets and inventory; intangible assets such as non-compete agreements, customer relationships, trained and assembled workforce, medical records and proprietary technology; and real estate. Pinnacle also provides clients with valuable insights on options to buy or sell business interests, securities and off-balance sheet arrangements.
- Compensation Valuation & Provider Arrangements
- Strategy, Value-Based Care & Cost Reduction
- Coding, Compliance & Revenue Cycle Services
- Enterprise Risk & Healthcare Operations Management Support
- Real Estate Consulting
BUSINESS & CAPITAL ASSET VALUATION
Transactions involving physician ownership or not-for-profit entities require fair market value determination to comply with Stark, Anti-Kickback and IRS regulations. Pinnacle applies years of healthcare industry specific knowledge and experience to value unique transactions and business arrangements such as:
- Mergers & Acquisitions;
- Joint Ventures;
- Owner buy-in and buy-out;
- Lease Transaction;
- Capital Asset Inventory;
- Bankruptcy and Liquidation Valuation;
- Personal Goodwill; and,
- Block discounts for private ownership of publicly traded shares.
FINANCIAL DUE DILIGENCE ANALYSIS – QUALITY OF EARNINGS
Financial Due Diligence Analysis – Quality of Earnings
The financial due diligence process offers a deep dive analysis into the operational history of a subject company. Our team of Chartered Financial Analysts and Certified Public Accountants identifies revenue streams and expenses, validates these figures against operating metrics and related contractual agreements, and makes suggested financial adjustments that bring reported earnings in line with actual and replicable earnings for the subject company. This type of analysis is an important step in the transaction process that builds confidence for any buyer. It delivers peace of mind that a subject company will be able to continue earnings at a given level with new ownership or management into the foreseeable future.
What does our analysis include?
- Operating and Non-Operating income validation;
- Major expense category validation;
- Historical financial trend analysis;
- Identification and analysis of debt obligations;
- Identification of ownership and management legal standing and healthcare provider sanctions;
- Arms-length operating transaction validation;
- Identification of related parties and entities;
- Legal and regulatory validation;
- Adjustments for non-operating, non-recurring, or personal expenses;
- Explanation of how contracts interact with revenue and expense categories;
- Comparison of company specific policies and procedures to industry best practices;
- Analysis of accounts receivable process and estimate of collectability; and,
- Concluding judgement of overall earnings quality.
Further, Pinnacle’s accounting and revenue cycle experts can analyze a targets payor contracts and:
- Prepare a black box analysis for purposes of compliance with Antitrust; and,
- Develop pro forma analysis for internal decision making.
PURCHASE PRICE ALLOCATION
Once a transaction is consummated, the transaction must be allocated to the appropriate components on the purchaser’s balance sheet. Pinnacle’s team of CPAs and CFAs bring years of experience valuing tangible and intangible assets for accounting allocation consistent with FASB Accounting Standard Codification. Pinnacle can assist with the following:
- Business combinations under ASC 805 consistent with the fair value definition under ASC 820;
- Impairment testing under ASC 350 and 360; and,
- Filing of IRS form 8594.
INTELLECTUAL PROPERTY VALUATION (PATENTS, TRADE SECRETS, TRADEMARKS / TRADE NAMES)
Whether for acquisition, licensing or other arrangements, Pinnacle values a variety of intellectual property and intangible assets including:
- Patents and proprietary technology;
- Trademarks, trade names and brands;
- Customer relationships and patient data;
- Non-competition agreements; and,
- Trained and assembled workforce.
INVESTMENT & CASH FLOW ANALYSIS
Clients are often presented with investment opportunities such as the sale of the business, practice buy-in or formation of a joint venture and need outside expertise to assist with business decisions. Pinnacle’s healthcare transactions experience allows us to assist with:
- Return on Investment Analysis;
- Cash Flow Simulation;
- Build vs. Buy Analysis; and,
- Debt Service and Phantom Income Tax Liability Coverage.