THE MERGER PROCESS

The following document highlights the key aspects addressed by The LaPenna Group when engaged to facilitate the merger discussions of physician practices.

Individual, Confidential Physician Interviews

Financial Review of Each Practice (Prior Three Years)

Income & Expense

Liabilities

Real Estate

Physician Compensation/Residual

Financial Modeling, Merged Practices, Year One

Completed Summary Report – including an issues List

Establish timeline, and set regular meeting dates

Ownership/Equity Determination

Governance Issues Resolution

Income Distribution Formula

Real Estate

Legal Due Diligence/Document Preparation

Assignability of Present Contracts

Title to All Assets

Corporate Name/Corporate Vehicle

Document Preparation

Potential Operational Issues/Work

Personnel Wages, Benefits

Staffing Plan

Billing

Space/Schedules

Medical Records

Public Relations

THE MERGER PARTICIPANTS

Physicians

Facilitator

Financial Analyst

Accountant(s)

Attorney(s)

THE MERGER TIMELINE

Phase One 5 Weeks

Conduct Physician Interviews
Perform Financial Analysis
Prepare Initial Report – Identify “Deal Killers”

First Meeting

Phase Two 16 -20 Weeks

Weekly Meetings for Decision Making
Due Diligence
Document Preparation

Operational Issues Resolution

On-Going

PROPOSAL FOR MERGER FACILITATION

Activity Consultant Timeline
Personal, confidential interviews with each physician) Associate Completion within two weeks of project initiation
Financial analyses of all practices, including three years’ historical income and expense, balance sheet information, personnel costs, physician residual Associate Completion within four weeks of project initiation, assuming all practices submit data within first two weeks
Data entry for financial analyses described above Clerical staff As data are received, within two business days
Preparation of first year financial model for merged entity, with assistance of designated physician(s) Associate One week following completion of financial analysis
Preparation of narrative report listing critical issues and creation of first meeting agenda for physician resolution Associate In concert with completion of financial analysis
Facilitation of first meeting of physicians, review of critical issues and resolution Principal and Associate (no charge for Associate’s participation) Within one week of submission of narrative report
Facilitation of income distribution model development* Principal and Associate (no charge for Associate’s participation) Complete over a period of four-six weeks following first meeting
Facilitation of governance issues resolution* Associate or Principal Complete during four-six week period following first meeting
Total Timeline Approximately 12 weeks

*Indicates attendance and participation by attorney(s) and/or accountant(s).

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