Buying into ASC

[PMRorBUST]

Have a job offer to work with an Ortho group where they are offering buy in to their surgery center. What are the appropriate questions to ask? Never dealt with anything like this before so I appreciate any input! Thanks!

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[lmsanscafe]

How much to buy in? Financing options from the company? Would the revenue be split equally? How will they write this in the contract? What are the obligations once you do buy-in?

 

[RoloTomassi]

Since this is not something you have experience with, if you're serious, before you make a decision, you should get the advice of experts with specific knowledge about ASCs, including a healthcare attorney and valuation expert or accountant.

How much is buy-in? How many shares/percentage does that get you? How is that value determined? FMV? Book value? Who did the valuation? Objective third party? Can you commission your own valuation? Purchase terms? Option to buy more in the future? How will your shares be diluted when others buy-in after you? What do you get for your buy-in, financial partnership only or any control/rights/voting? If not who does? Who are the other shareholders? Different classes of stock? What the expected ROI? Historic dividends, profit loss statements, balance sheets, projections/health? How are dividends paid? How is debt handled? Buy-out formula? When/how paid? Restrictions post?

If they are transparent and give you operating agreement and financials over several years you and your experts can answer these questions and more. Need to do your due diligence. Look at it as if a stranger is asking for a 6-7 figure investment in a stock you know nothing about. Can't assume is a safe buy, might be a huge mistake.

 

[Agast]

ASC ownership may be on the table but most likely you will not be allowed to buy in until a certain length of time, ie the time it takes for them to decide if they want to continue your contract. Also what happens to those shares if you leave? Is there an agreement that you are bought out by the group for fair market value? Or if you don’t find a buyer do they revert back for pennies on the dollar? Is this an ASC owned by the orthopedic group or do other physicians use it as well?

 

[Multimodal]

this is all super helpful. I am going through the process right now for the 1st time. RoloTomassi's post above is an excellent and concise summary of the high points. I wish I had read that before I started these negotiations a few months ago.

 

[paindoc34]

Since this is not something you have experience with, if you're serious, before you make a decision, you should get the advice of experts with specific knowledge about ASCs, including a healthcare attorney and valuation expert or accountant.

How much is buy-in? How many shares/percentage does that get you? How is that value determined? FMV? Book value? Who did the valuation? Objective third party? Can you commission your own valuation? Purchase terms? Option to buy more in the future? How will your shares be diluted when others buy-in after you? What do you get for your buy-in, financial partnership only or any control/rights/voting? If not who does? Who are the other shareholders? Different classes of stock? What the expected ROI? Historic dividends, profit loss statements, balance sheets, projections/health? How are dividends paid? How is debt handled? Buy-out formula? When/how paid? Restrictions post?

If they are transparent and give you operating agreement and financials over several years you and your experts can answer these questions and more. Need to do your due diligence. Look at it as if a stranger is asking for a 6-7 figure investment in a stock you know nothing about. Can't assume is a safe buy, might be a huge mistake.

This is great!
Do you have a recommendation for a healthcare attorney and valuation expert / accountant that you could pm me?