In September, Winstead hosted a virtual event entitled “Physician Roll-Up Transactions.” The event, which was moderated by Winstead Shareholder Justin Hoover, featured Torie Berkowitz, Corporate Counsel & Director of Legal Affairs at Epiphany Dermatology, Joanne Comer, Sr. VP, Corporate Development at WellMed Medical Management, and Daniel Hosler, CEO and Co-Founder of Allied OMS. During the event, the speakers explored some of the different strategies, trends, and challenges surrounding physician roll-up transactions, as well as the world of Physician Practice Management. Here are some of the key takeaways from the event:

1. In the broader business world, companies are fundamentally valued based on their cash flow. Accordingly, an important step in physician roll-up transactions includes closely examining the practice’s cash flow and getting a glimpse of how the practice's financials look after year-end distributions to the owners of the practice.

2. In the private equity buyer market, when doctors partner with many of these firms, they often take a pay cut post-closing, with that pay cut generally corresponding to additional cash payments received at closing. Also, private equity firms generally want to see an alignment of interests, so they may buy up to 90 percent of practice but still expect physicians to reinvest alongside them.

3. Another key trend relates to changing views regarding the private practice of medicine between new doctors and more seasoned doctors. With the increasing costs of higher education, more and more people are reliant on student loans. As a result, there is a change in mindset with newer doctors. Some of them are not sure they want to be the owner of a practice. This shift is instilling fear in some older doctors as they are not sure whether they will be able to find a buyer or a similar market (as when they entered the field) when they are ready to sell their practice.

4. Preparation is very important in these transactions—and to help with this process, physicians should practice patience and seek the input of third-party advisors. This is especially important because this process is new to them and often involves procedures and measures they are not familiar with. As such, preparing for a transaction in advance, including seeking out the help of trained advisors, can help to make the process much smoother and less stressful.

5. Finally, physicians can help prepare for a transaction by getting started on document compilation and other preparatory due diligence early on. This is important as physicians must still manage their practice while at the same time trying to execute on a transaction.