When a DSO, MSO, or private equity group makes a direct offer to purchase your practice, it can be tempting to move forward without representation. After all, why pay an advisor when you already have an interested buyer? Here’s what experienced practice owners understand about that situation.
What that offer is actually worth
The healthcare practice market is more complex than any single offer reflects. While a direct offer might look attractive on the surface, the relevant question isn’t whether it’s a good number – it’s how it compares to what other buyers would pay if they were competing for your practice.
Buyers who approach you directly are incentivized to purchase at a price that works for them, not one that reflects your full market value.
What happens between offer and close
What appears straightforward at first often becomes more complicated during due diligence. Initial offers frequently get reduced during underwriting. Deal terms can limit long-term value in ways that aren’t obvious in the original letter of intent. Unexpected post-closing obligations can emerge. Without representation, you have limited negotiating leverage and fewer tools to push back when those changes come.
What professional representation actually does
Working with an M&A advisor changes the dynamic in a few specific ways. They bring market knowledge that tells you whether the offer in front of you reflects actual market value. They handle complex transaction details while you stay focused on running your practice. And most importantly – they create competitive tension by bringing other buyers into the process, which gives you leverage you simply don’t have with a single interested party.
Key benefits of professional representation
- Higher purchase prices through competitive processes
- Better deal structures protecting long-term value
- Reduced risk of price reductions during diligence
- Time savings and maintained practice performance
- Protection of priorities beyond just price
- Clear timeline management through closing
- Expert guidance through complex negotiations
- Protection against common transaction pitfalls
At PTG, we work exclusively on the sell side. Contact us to discuss your specific situation – including any offer you’ve already received.
Frequently asked questions
Should I respond to a direct DSO offer before talking to an advisor?
Talk to an advisor first. Once you respond – particularly if you sign an LOI or exclusivity agreement – your options narrow significantly. Getting a read on the offer from someone who knows the market costs you nothing and gives you information you can actually use.
Will involving an advisor kill my deal with the current buyer?
Serious buyers don’t walk away because a seller has professional representation. If a buyer is discouraged by the fact that you have an advisor, that’s worth knowing before you go further. In most cases, buyers expect representation and the process continues.
Can an advisor really get a better price than what the buyer already offered?
Often, yes. Competitive processes consistently produce better outcomes than single-offer negotiations. Even when the original buyer wins the deal, the existence of competing interest changes their behavior. The final price, terms, and structure are all affected by whether you have one interested party or several.
How do I know if my current offer is actually competitive?
You probably don’t – and that’s the point. Without a market process, there’s no basis for comparison. An advisor with current transaction experience can give you a realistic read on where your offer sits relative to what the market is actually paying for practices like yours right now.
