Mergers: Pause and Question

Good post by good friend and colleague, Mark Weiss at the Advisory Law Group:

Strength in numbers. Or is there?

Medical groups seeking alternatives to the sale of their practice to a hospital often consider merging with another group. There’s nothing wrong with the notion of a merger. Often, there’s something right. But not always. For example, merging two weak performing groups rarely creates a strong one. Think Sears plus Kmart.

Merging even two strong groups can be problematic, as there’s far more to a successful merger than balance sheets — focus, personnel, management style and group culture play determinative roles.

I’m not saying don’t consider a merger: If you’re looking at alternatives you have to. But seek the right merger partner — a strategic merger, one in which one plus one equals 3 or more. Bad math, but good business.