The sales process

The sales process begins once the buyer and seller find each other. A transaction starts with the two coming to a general understanding which is then reduced to a letter of intent. This letter will spell out the intentions of the parties and signals the beginning of the buyers due diligence period.

Following the letter of intent, the buyer will begin reviewing the sellers operations, financial statements, intake process, and patient charts. The buyer will want to assure themselves that the company being purchased was accurately presented to them.

At the same time the seller and buyer will be negotiating the finer points of the deal and drafting the transaction documents. The seller will be asked to make several formal representations and warranties to the buyer. These would include warranties that the seller has not been excluded from any Federal payor programs, and representations about any audits, debts, liens, and encumbrances. These documents would also outline the payment to the seller, along with any personal guarantees and escrow instructions.

Finally, the seller would conclude their financing and obtain any necessary third party consents. Upon complete, the transaction is concluded.

The process described above can take from 4 to 10 weeks. This time estimate begins from the time that the buyer and seller have agreed to the basic terms and a letter of intent is drafted.

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How does the sales process work?

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Comparison with a broker

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