10 ways to mess up your deal

• Seen inspired hospital leaders accomplish dramatic results

• Seen fumbled communications and tone-deafpolitical thinking imperil the hard, smart, difficult work invested to save or advance a hospital

• Seen poor planning and lack of coordinated processes delay or destroy a transaction that was in all parties’ best interests

• Seen lack of agreement on transaction goals hinder forward progress and increase cost to buyer and seller

• To avoid costly political and communication mistakes

• To use political thinking to win

• To put in place a strategic well thought-out process

• To coordinate the team approach

So that...

• Your hospital deals occur

• The hospital itself is positioned for a successful future

• The clients are happy

• Limit who is included in the team

due to traditional titles

• Cover only the basics like

finance, operations and legal

But…

• The deal is more complicated than that

• Experts from various backgrounds are

needed to execute a successful deal

So…

Include a seat at the table for the following:

• Management

• Financial Advisors

• Legal Counsel

• Accountants

• PR Consultants /

Strategists

• Benefits Experts

• Real Estate Experts

• Bankers

• Others?

• Limit information flow to departments

with a seat at the negotiation table

• Forget about integration process; how

this will really work in the end

But…

• The devil is in the details

• The numbers are important – but so

are people, physicians, culture

So… Focus on:

• Due diligence process

• What to include

• Who reviews

• Issues to cover

• Work product

• Who receives / how to communicate

• What filings and approvals are required

All bets are off if there are

any points of differentiation

But… remember the bigger picture

So…

• Start with the template

• Adjust for specific transaction

• Focus on what is important to the client

• Do not fall on every sword

• Rely on prior transactions for guidance

• Involve Board of Directors

• Communicate in silos

• Forget about even those closest to

you – your own team

• Leave the dealmakers (and

breakers) in the dark

But… Communication is often

missed at the simplest level

So… Communicate with

• All team members

• Client

• Target and its counsel

• All applicable government agencies

• Certain payors

• Assume they know the answers

• Overcommit on deadlines and

hurdles

But…

• There is no “regular”

process

• Expect the unexpected

So… Let them know about:

• Timing on diligence

• Licensure and certification

• Uncovering a reportable event

• Financing needs

• Securities laws (if applicable)

• Faith-based entities

• Assume you can keep it secret

• It’ll keep panic and lobbying to a

minimum

• We'll talk when we can answer every

question

But…

• This news is too juicy

• Nobody likes change

• Nobody like surprises

So…

• Have messages and communications materials prepared early

• Bring them along

• Build context over time

• Build trust

• It erases the debt

• It'll pay off the pension liability

• It’ll make us a tax-paying business

But…

• This is a political, emotional event.

Speak to it.

• Logic loses to emotions;

spreadsheets are deadly.

So…

• Use political language

• Stability so we are here to care for your

grandparents

• Security for our caregivers

• Quality care through new equipment,

shared services, affiliations

• Use the broker, the accountant,

the lawyer, the PR agent to

deliver the news

• Use the CEO nobody trusts

But… the messenger IS a

message

So..

• Find and use the credible

voice

• Someone invested, trusted

But…

• Faceless buyers are demonized

• Easy for naysayers to distort

reality

• Why won’t they talk to us? What

are they hiding?

I don't want them messing in "my"

hospital with "my" people

So…

• Get them on the ground, in the halls as early as possible

• Promote personal interaction with physicians & staff

• Have them share their story; it's a team effort

• Communicate only at

- The LOI

- The definitive agreement

- The close

But…

• Social media exists

• Conversations and rumors mill

churning every day, every hour

So…

• Communicate constantly.

Weekly. Daily. Build a website.

Open a hotline.

• Create & engage in dialogue

• Develop the campaign message

• Identify and train the voice

• Target the "votes" you need to need to

win

• Mini-campaigns for each key audience

• Who's the right person to speak to our

physicians, the AG, the Mayor, our nurses,

the newspaper? What do they need to hear?

• Anticipate opposition and prepare for it

• How will we take questions / squelch

rumors?

Early on, develop a communications campaign

team with:

• Communications / Government relations

• Legal

• Operations

• Broker / Financial advisor

Work together to build and manage the

campaign.

QUESTIONS?

? ? ???

? ? ? ?

David Jarrard

djarrard@jarrardinc.com

www.JarrardInc.com

Cynthia Y. Reisz

creisz@bassberry.com

www.bassberry.com