Healthcare Mergers and Acquisitions Jargon, Part 2

• “Bandwidth” – buyer has ability to review and evaluate multiple deals

• Indemnity – What seller has to provide to stand behind statements represented and warranted in a sale contract

• MAC Provision – part of purchase contract that deals with material adverse events before closing

• “CHOW” – In healthcare industry, there is typically a licensure or change of ownership application process.

• Pro Forma – Financial Model of Projected Revenues and Expenses, incorporating buyer’s operating assumptions and plans often testing multiple scenarios.

• TLM – Trailing Twelve Months of Financial and Statistical Data

• Re-Trade –Buyer’s Renegotiating Purchase Price Reduction After Agreeing to Purchase at a Higher Price Buyer Signs Deal That They Don’t Intend to Honor. Bait and Switch

• Earn-Out - An arrangement in which sellers receives additional future payment, usually based on future earnings.

Healthcare Mergers and Acquisitions Jargon, Part 1

• Middle-Market – Transactions generally under $1 billion and involve non-publicly-traded companies.

• One-Off Deal – Purchase of a single facility or entity, not a multiple entity deal

• Portfolio Deal – Multiple facility or service sale

• “Deal Has Hair” – a complexities and complications of selling company

• ‘’Tuck-in’’ Deal – small niche deal that fills hole in company’s portfolio

• “The Ask” – A term or condition of the business deal that one side is requested

• "Open Up the Kimono” – seller is willing to disclose confidential company information

• Data Room – online virtual cloud where confidential due diligence is stored

• “Cratered” – as in the deal crated…fell apart