Inside the ASC Deal Process: From LOI to Close

Stephanie Terry, who brings more than three decades of ASC industry experience spanning development, operations, and equity ownership, recently joined the This Week in Surgery Centers podcast by HST Pathways. Stephanie works closely with physician groups to evaluate partnership opportunities and guide them through the transaction process from start to finish.

Watch the full episode below:

 

Topics Covered in This Episode

  1. What the ASC transaction process looks like at a high level, from the initial phone call through evaluating the business and gathering due diligence
  2. Common readiness gaps physician groups should address before going to market, including physician equity distribution, recruitment timing, and revenue cycle management
  3. What goes into a Confidential Information Memorandum (CIM), and how it helps prospective buyers understand a center’s full opportunity, not just its financials
  4. The typical transaction timeline, including the 45-day window for letters of intent (LOIs) and what physicians should expect during buyer meetings
  5. Common deal terms and structures, including management fees, non-competes and tail provisions, and billing and collection agreement lengths
  6. How to evaluate multiple competing offers, and why the highest price isn’t always the right choice when culture, alignment, and long-term performance matter
  7. The impact of payer contracts and supply chain volume discounts on post-transaction profitability
  8. What a quality of earnings (QoE) analysis is, why buyers require it, and how physician groups can reduce friction during the process
  9. What happens after QoE, including drafting definitive legal documents like the member interest purchase agreement (MIPA) and amended operating agreements
  10. Common hurdles in the final stretch of a deal, from lease agreement negotiations to last-minute legal back-and-forth
  11. What post-close transition typically looks like, including payroll, benefits, and IT system changes
  12. Stephanie’s top recommendation for ASC leaders this week: stay on top of your financial reporting and consider where outside expert review might help
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