When to allow a potential acquirer access for "due diligence/transition"?

Provided by:  Jennifer Kirschenbaum, Esq.

January 30, 2018

Question:

Hi Jennifer, 

I finally found an entity to take my practice over.  They want to come in and look around and meet my employees.  When is that appropriate?

Thanks, 
Dr. L

Answer:

Absolutely no materials should be sent over for review without a non disclosure agreement or confidentiality agreement in place.  As far as physical access goes, yikes! Make sure you have a pretty done deal to ensure your staff doesn't get spooked, or even worse, your operations are interfered with outside of spooked staff (i.e., I've seen payors notified of a Tax ID change before a sale is actually consummated - total nightmare for seller and creates a "no way out" scenario).  It's great you have an interested buyer, and its great they are motivated - but make sure you have the right counsel from the start to protect your practice from premature onboarding, and also for the terms going in, and anticipating a potential divorce, if needed.

Happy to discuss offline for more specific advice!