Buying and Selling an HME Company
• Reviewing patient files
• Reviewing correspondence and other documents with MACs, CMS, PSCs, state Medicaid programs and other government agencies
• Reviewing results of past third party payor audits
• Interviewing ABC’s employees
Assuming that XYZ is satisfied with its due diligence, then the parties will sign the SPA and will close. XYZ will likely pay about 75 percent of the purchase price at closing and pay the other 25 percent within six to 12 months after closing. XYZ will have the right to offset against the “back-end” portion of the purchase price in the event that ABC breaches the “reps and warranties” contained in the SPA.
Prior to closing, XYZ will ascertain which of the ABC employees XYZ wants to retain after closing. A condition of closing should be that the designated employees sign employment agreements with XYZ that include reasonable noncompete and nondisclosure provisions.
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