Q&A with TripleTree Founding Managing Director Dave Henderson:
Q: How does TripleTree achieve transaction outcomes that exceed client expectations and industry norms?
A: It has always been obvious to us that we can’t achieve strategic outcomes for our clients if we are unable to think strategically, in regards to their unique business and markets. In every engagement, we are fully committed to understand our client’s business, industry dynamics, and the motivations of prospective buyers. At TripleTree, we take a customized approach to clearly explain the value proposition of every client and how that value translates and aligns specifically with the buyer’s interests. The acquisition of mid-sized businesses can provide great opportunities for larger companies if the strategies, business models, financials and cultures are well-aligned.
Q: As a sell-side M&A advisor, how do you work with the buyers in a transaction?
A: We spend a lot of time with the buyers of a business to determine how they view the business and how it will operate after they own it. What we’ve learned through the years is that if we can orchestrate the right business and cultural fit then it usually also translates into the best financial deal. Win-win transactions occur when the buyers fully understand what they’re getting and they are focused on the growth opportunities and value created through the acquisition.
Q: What are the primary drivers behind most M&A transactions?
A: The focus is always on maximizing shareholder value. Clearly, market share and access to new markets to drive revenue growth are key motivations for M&A activity. To increase shareholder value through a transaction, the primary drivers are generally entrance to new geographical markets and sales channels, financial benefits to increase shareholder value, increasing and protecting market share, acquiring new products and services, acquiring intellectual property, and supply chain control issues.
Q: What are the common characteristics or ingredients of a successful M&A transaction?
A: We’ve found that successful deals can be achieved by focusing on three core priorities in the pre-deal phase. These priorities are synergy evaluation, integration planning, and due diligence. Cultural issues are very important for the success of a deal. Giving early emphasis and selecting a management team, assessing and resolving cultural issues, and planning and executing communications throughout the process are all very important elements.
Q: What is your view on the increasing consolidation and deal volume in the healthcare industry?
A: Confidence in mergers and acquisitions as a means to drive growth has never been higher. The rate of change and consolidation in healthcare is a result of the significant innovation and disruption occurring across all sectors. Regardless of the outcome of healthcare reform legislation, this is a period of significant transformation. To achieve the challenging objective of reducing costs while improving quality and outcomes, the major industry stakeholders will be forced to collaborate and integrate like never before. With a focus on patient-centered care, providers, payers and vendors are all converging to develop innovative new solutions. This convergence will naturally create M&A opportunities. The key is focusing on synergies and value creation.