HIMSSCast: CFOs are looking to accomplish goals through smaller M&A transactions
CFOs want to find the right acquisition target that fits the culture of the organization, says Vin Phan of BDO.
Photo: Tetra/Getty Images
Vin Phan is a partner and practice leader of BDO's National Healthcare Transaction Advisory Services practice. He works with companies on financial due diligence, including M&A transactions.
In a recently released 2023 BDO survey polling 100 CFOs, four major themes emerged, Phan says. These are: the need to enhance digital capabilities for better care outcomes and to improve margins; expanding into new market segments; growing and capturing market share; and enhancing product and service offerings.
The survey shows that one way CFOs are looking to accomplish greater market share is to enter M&A transactions. But unlike in years past, these are add-on transactions in which a larger organization acquires a smaller target company to integrate it into the larger organization.
Hear more about CFO strategy and the four major themes that emerged in this HIMSSCast interview with Phan and Healthcare Finance News Executive Director Susan Morse.
Talking Points:
- CFOs are looking to accomplish strategic goals through smaller M&A transactions this year.
- CFOs are looking to expand into new market segments.
- CFOs are looking to expand into more lucrative markets, as outpatient facilities and ambulatory surgery centers didn't see the same profitability growth as other sectors of healthcare.
- CFOs and organizations are looking to capture market share and reverse margin compression by merging or acquiring their competitors to capture market share and increase scale.
- CFOs want to enhance their product and service offerings to diversify revenue streams.
- CFOs see four challenges including finding the right acquisition target that fits the culture of the organization; understanding the complex regulatory compliance requirements; achieving ROI through the transaction; getting the deal done in the current economic environment; and the increased cost of capital.
More About This Episode:
Public health emergency to end on May 11
Margins hammered as hospitals faced rough financial year in 2022
Updated: UnitedHealth closes $5.4 billion deal with LHC
Amazon completes $3.9B acquisition of One Medical
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
