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Facilitating the Merger of Two Plastic Surgery Practices
For more than 15 years, Drs. Anson and Higgins have operated a two-partner, multidisciplinary plastic surgery practice and medical spa in Las Vegas. Dr. Edwards had been in solo private practice primarily focused on breast and body procedures. BSM was approached to assist in facilitating the merger of these two practices to drive practice growth and improved efficiency.
BSM gathered financial, production, and operational information on each practice. We then developed a series of financial models that would enable the principals to see the "before and after" potential of the proposed merger. We also began to explore many other relevant issues that would become factors once we addressed the financial component.
Through a series of meetings, we were also able to gauge whether there was a good cultural fit among the partners. Although the physicians knew each other as professional colleagues, we agreed this is different than living under the same roof.
We provided our recommendations concerning ownership, governance, and income/expense sharing based on our initial assessment. From experience, we have found that practice mergers do not work well when one party may sacrifice their bottom line for the support of the merger, so we were sensitive to this when presenting the new business plan. During this part of the process, we were also testing the ability of the partners to communicate and compromise. In this case, we were impressed with how the partners stayed focused on the big picture and could find compromise.
BSM created an action plan covering all aspects of the transaction. We assigned leadership roles and timelines for completion. We worked closely with practice administration and respective outside advisors regarding legal, tax, and other business issues. We met many times throughout the process to talk through issues and to make sure everyone was aligned. We had the benefit of a strong administrative leader that served as our "go-to" person to make sure we stayed on track. She did a phenomenal job in managing the process on behalf of both practices.
We are happy to report the doctors are getting along well and the practice continues to grow several years after the merger was finalized. Of course, as in any business, new challenges have arisen; however, we have been able to work our way through these issues due to the respectful nature of the relationship and the consensus on the overall vision and values of the practice.
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