Very few health-care transactions, relatively speaking, fail to go to closing, but there are some common themes for those that don’t come to fruition.
Three attorneys who spend most of their time counseling health-care clients on the ins-and-outs of dealmaking told me the biggest reason some transactions fail is time. A client’s excitement about merging or combining with another entity may wane the longer it takes to do the deal, Randal L. Schultz, of Lathrop & Gage LLP, Overland Park, Kan.; Douglas B. Swill, of Drinker Biddle & Reath LLP in Chicago; and Paul A. Gomez, of Polsinelli PC in Los Angeles, told me.
Given enough time, a party may start looking around for “a more attractive partner,” Schultz said. Long delays by one party can lead the other to question its commitment to the transaction or the resulting entity, Gomez added.
Deals also can get bogged down during the due diligence phase, as the parties are getting to know one another and potential liabilities relevant to the deal are disclosed or uncovered, the attorneys said. Surprises can arise, such as finding out the potential partner is facing a government investigation or newly filed litigation.
Delays in required government approvals also occur, and sometimes the government’s refusal to grant approval or placement of conditions on the combination swamp a deal, the attorneys told me.
Although it’s “highly unusual,” deals occasionally fall apart at the “11th and a half” hour, Swill said. This occurs when parties discover they don’t quite mesh and fail to find a way to integrate operations that’s agreeable to everyone.
In short, there are many and varied reasons deals fail to close, and wise transactions counsel will anticipate and plan for them, the attorneys told me.
Read my full story here.
Learn more about Bloomberg Law and sign up for a free trial.
Stay on top of new developments in health law and regulation with a free trial to the Health Law Resource Center.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)