Current Events Affecting Ownership Transition and Pharmacy Valuations

Saturday, October 18, 2014, 9:00 am – 10:30 am
Austin Convention Center
Location: 18CD, Level 4
Continuing Education Credits: 1.5 (0.15 Contact Hours)
ACPE #: 207-000-14-205-L04-P and ACPE #: 207-000-14-205-L04-T

The explosive growth of the specialty pharmacy arena, including the recent introduction of some extremely expensive medications, coupled with continuing downward pressure on margins by third party payers and PBMs, has had a significant impact on the profitability of many independent community pharmacies. This impact leads, in many cases, to a reduced valuation for the typical/traditional independent pharmacy and a change in the way potential buyers of all types view acquisition opportunities. Buyers are engaging in much more due diligence than in the past and scrutinizing many aspects of a potential acquisition candidate’s business activities and financial statements in a manner that continues to cause downward pressure on pharmacy valuations. This often leads to attempts to renegotiate a previously agreed upon transaction. Lenders, as well, are being more conservative in financing pharmacy acquisitions for the same reasons. This, in turn, has led to a much greater time gap between the start of negotiations for an acquisition and the closing of a transaction.

Pharmacist and Technician Learning Objectives:

  1. Discuss current valuation methods being employed by buyers and lenders when valuing an independent pharmacy for the purposes of a change of ownership.

  2. Explain increasing information requests by potential buyers and the possible impact on a transaction after due diligence has been completed.

  3. Outline the process to get a proposed transaction, between a buyer and a seller who have agreed upon the price, to the finish line.

Speaker: Tony DeNicola, president, Buy-Sellapharmacy.com, Warren, Connecticut

Categories:
Activity Type: Application-based
Audience: Pharmacists and Pharmacy Technicians

Handout