How Rogerson Business Services Sold a Medical Practice Successfully

How Rogerson Business Services Sold A California Medical Practice Successfully

Introducing The Family & Cosmetic Care Medical Practice

The case study showcases a thriving family and cosmetic medical practice located in Loomis, California, which is poised for a relatively straightforward sale.

Loomis Medical Clinic Family & Cosmetic care offers a comprehensive range of women's health services, encompassing pelvic exams and Pap smears. Additionally, our dedicated providers specialize in managing chronic diseases such as diabetes, heart disease, and other long-term conditions, ensuring patients maintain optimal control.

At Loomis Medical Clinic, physicians provide an array of cosmetic procedures for both women and men seeking nonsurgical, anti-aging solutions. Their skilled providers utilize renowned products like Botox®, Restylane®, and Juvéderm® to effectively minimize wrinkles, fine lines, and facial creases.

In June 2022, the owner made the decision to sell his esteemed medical clinic, which had already been flourishing in Loomis, California. Motivated by the desire to retire, a strategic marketing campaign was promptly launched to identify a proficient and interested buyer within a reasonable timeframe.

The Challenge Selling Loomis Medical Clinic

Finding qualified and interested buyers for a medical practice in California is hard, especially since they must be licensed doctors in the state. In this case, the listing attracted a fair amount of interested buyers and to a surprise to all, many interested buyers were out of state as stated by Dr. Gramm. While the financial performance of the medical practice was appealing to potential buyers, there were additional factors to consider. Financing would not be one of them in this situation since the health of the company would easily support an SBA loan if necessary.

The validity of a doctor's license is limited to the state it was issued in. It is important to note that being licensed in a different state does not automatically grant authorization to practice medicine in California. The Medical Board of California must first register the doctor before they can begin practicing.

In order to successfully close the sale of a medical practice, all necessary steps must be completed. Obtaining information from the licensing agency, as well as consulting with a specialized attorney or a medical business broker, can be highly beneficial in this process. These sources are known to provide prompt and effective assistance in this matter.

Prospective purchasers must have both the appropriate down payment and the means to secure an SBA or conventional loan in order to acquire the medical practice available in California. Ideally, the perfect candidate would be a licensed doctor with current or easily obtainable licenses, as well as possessing financial stability.

The Medical Practice Buyer

Around eight months after the medical practice was put up for sale, our marketing efforts finally paid off as we found the perfect buyer. Not only did they have a substantial down payment that enabled them to secure a loan, but they also displayed genuine interest and readiness to acquire the medical practice.

While the buyer did not possess all the necessary licenses initially, they did possess the specific one that made it simpler to obtain the remaining requirements for the medical practice. It seemed that everything was perfectly aligned and in accordance with the necessary protocols.

The Definitive Purchase Agreement

Dr. Gramm had a pleasurable experience meeting potential buyers who were interested in acquiring his business. These meetings were characterized by smooth interactions, excellent collaboration, and outstanding communication.

The negotiations commenced with the presentation of an offer. The buyer expressed a desire to secure an SBA loan in order to finance the acquisition, as no seller financing options were available. Once all the aforementioned details were mutually agreed upon and a settlement was reached, the buyer proceeded to sign a Letter of Intent. Subsequently, in April 2023, a definitive purchase agreement was executed. Although the original closing date was scheduled for early December 2022, this timeline was adjusted accordingly.

SELLING PROCESS

due diligence stage of an M&A sell-side process in Califonria | Lower Middle Market Businesses

THE NEGOTIATIONS PHASE

After initial negotiations, the next step in a transaction involves due diligence, which is the process of verifying the seller's statements.

This stage is crucial to ensure that the buyer is making a sound investment.

To facilitate a smooth and efficient due diligence process, it is advisable to seek the assistance of a business broker who has experience in handling such transactions, said Dr. Gramm of Loomis Medical Clinic.

He continued by stating: With their expertise, they can help identify potential issues and address them before they become major roadblocks to a successful and timely closing.

Andrew Rogerson said: Both were prepared to sign the final purchase agreement.

definitive agreement | lower middle market businesses in California

PURCHASE AGREEMENTS

Both parties have agreed to engage in a stock sale transaction with the primary objective of achieving specific tax benefits.

This is part of the definitive agreement.

sba loan and financing a business for sale | lower middle market businesses

SBA LOAN PROCESS

The process of acquiring or selling a medical practice can become intricate, especially when an SBA loan comes into play.

The loan process often disrupts the transaction's flow, necessitating a pause to address the issue before moving on to the next stage.

In this particular case, determining the medical practice's worth only required one business valuation. Surprisingly, the sale concluded in May 2023, making it one of the smoothest and most successful sales experienced by Andrew in his 15 years in the industry.

escrow when selling a business in California

THE ESCROW COMPANY

After completing due diligence and obtaining legal, accounting, tax, SBA loan paperwork, asset titles, and allocations, all transaction details are forwarded to the escrow company.

In California, escrow is required for most commercial transactions to safeguard both parties. While medical business brokers may try to handle many of the steps themselves, it's typically best for both parties to have legal counsel review all documents before the final escrow and sale closing.

We at Rogerson Business Services strongly advise both buyers and sellers to have an attorney on their team to safeguard themselves. Selling a business is usually one of the most complicated and financially significant decisions that someone will make in their life. Their company is frequently a component of the seller's retirement plan, and getting things right the first time is critical.

The legal ramifications of any transaction can be significant, ranging from escrow to taxes to leases to licensing. There are a lot of legal complexities involved in buying and selling a company, and it's something you should never attempt alone. A deal team is required to surround yourself with experts who are trained business brokers. That begins with hiring a certified business broker

Are you looking for a broker to sell your medical practice in California? To assist you every step of the way, you'll need a medical business broker. We at Rogerson Business Services want to be your medical business broker. Get in touch with us now. We'll get you up and running selling your medical clinic as soon as possible.

HAPPY EXIT

Dr. Gary Gramm, proprietor of Loomis Medical Clinic, was overjoyed when escrow officially concluded. It is crucial for potential sellers to heed sound advice and never attempt to sell their medical practice without the expertise of a qualified broker who possesses comprehensive knowledge of the intricacies of medical practice business sale transactions.

"Securing the services of a business broker familiar with the sale of medical practices is essential”

HAPPY BUYER

The purchaser of the medical practice was overjoyed when the escrow process finally concluded. The purchaser diligently went through the necessary investigations and inspections. Thanks to Dr. Gramm's exceptional organization and provision of the appropriate documents for examination, all concerns were addressed smoothly and transparency was achieved.

"The importance of having practice information such as numbers of patients, accurate receivables, revenues, expenses, profit and loss accuracy, staff salaries and payor mix.”