Every year, acquirers approach physical therapy and healthcare practice owners directly with an offer. The pitch is carefully constructed: it feels flattering, it seems fair, and the buyer uses language designed to make urgency feel like opportunity. But a direct, one-off offer is structurally engineered to benefit the acquirer — in price, in structure, and in every contract term that follows.
A single buyer approaching you directly will offer a number that works for their return model — not a number that reflects what your practice is worth to the full universe of qualified buyers. A competitive process reveals how multiple buyers value your practice simultaneously, and the gap between a direct offer and the winning bid in a structured auction is rarely marginal. Beyond the headline price, a process also produces better structural terms: escrow size, earnout mechanics, employment agreement scope, and non-compete breadth are all negotiated from a position of strength rather than dependency.
When a buyer approaches you directly, they are doing so because they believe they can acquire your business below the price a competitive process would establish. They have spent months — sometimes years — analyzing your practice. They have set an internal price ceiling based on their own return requirements. Every term they offer is drafted to protect that ceiling, not to maximize your outcome. Their advantage is total information asymmetry. The only remedy is competition.
Leverage in an M&A negotiation is not a function of how good your business is. It is a function of how many credible buyers are at the table simultaneously. A single acquirer — no matter how enthusiastic — knows you have no alternative. That knowledge shapes every aspect of how they negotiate: how far they move on price, how aggressively they draft reps and warranties, how long they allow diligence to drag, and whether they accommodate any structural terms that favor the seller.
When a buyer knows they are your only option, they have no incentive to sharpen their offer. When they know three other qualified institutional acquirers are evaluating the same business on the same timeline, every buyer sharpens their offer — because the cost of losing the deal just became real. That competitive tension is worth more than any negotiating tactic or legal strategy. It is the foundational condition from which all other seller value flows.
When a strategic acquirer or PE-backed platform approaches you directly, they have already built a detailed financial model of your practice. They have estimated your adjusted EBITDA using industry benchmarks and CMS data, identified your payer mix from public sources, and set an internal price ceiling based on their acquisition return requirements — before they ever make the call. Their opening offer is not a good-faith starting point. It is a number calibrated to clear their internal return threshold while being high enough that you might accept it without consulting outside advisors.
Meanwhile, you are being asked to evaluate a number you have never seen before, for a transaction type you have never done, from a buyer who has executed dozens of acquisitions using the same playbook. This is a structural information asymmetry that only resolves in your favor when competing buyers force the market to reveal what your practice is actually worth.
The leverage problem compounds beyond headline multiple. Without competing buyers, the acquirer controls the deal timeline. They can slow diligence to fatigue the seller. They can introduce re-trade attempts — renegotiating price downward after the LOI using findings as pretextual leverage — because the seller has no credible alternative. M&A advisory firms consistently document that re-trades are particularly common in proprietary one-buyer processes, where the acquirer intentionally bids high to win exclusivity and then uses the diligence period to execute their real pricing strategy.
In contrast, a seller in a competitive process retains the right to walk from any single buyer. That right changes the buyer's behavior at every stage — because they know the cost of losing the deal is real. That behavioral change translates directly into higher prices, cleaner structures, and better contract terms.
Leverage Is Created Before the Negotiation Begins: Sellers who accept a one-off offer negotiate inside the buyer's preferred framework from the first conversation. The only way to set the framework on your own terms is to introduce competition before engaging substantively with any single buyer. Once you accept an LOI, all other buyers move on. The window to create competitive leverage is narrow — and it opens only once.
One of the most costly risks in a one-off deal is the re-trade. A re-trade occurs when a buyer — after signing an LOI and initiating diligence — returns to demand a price reduction or material term change. It is a documented, widespread practice in private equity acquisitions, and it is disproportionately common in proprietary one-buyer processes where the buyer has secured exclusivity before the seller has any competing alternatives.
The mechanism is straightforward: the buyer bids aggressively to win the LOI and gain exclusivity. Once signed, the seller is contractually prohibited from negotiating with other buyers. The buyer then uses the diligence period to surface real or manufactured concerns — EBITDA restatements, billing irregularities, contract risk, integration assumptions — and uses those findings as justification to demand a price reduction, often at 10–20% below the agreed LOI price. The seller, months in, exhausted, with other buyers long gone, faces a binary choice: accept reduced terms or start over with nothing.
Re-trades can occur in competitive processes too. But their frequency, magnitude, and the seller's ability to resist them are fundamentally different when competing buyers are present. In a process, the seller's advisor maintains relationships with backup bidders through the LOI stage. The ability to credibly threaten reengagement with a backup buyer — or to actually reengage — removes the re-trade's core leverage: the buyer's certainty that you have no alternatives.
Without a process, that certainty is complete. The buyer who secures exclusivity in a one-off deal can wait until the seller has invested months of time, emotion, and legal fees before surfacing a re-trade attempt. By that point, the seller is psychologically and logistically committed. Walking away feels impossible. The buyer knows this and times the re-trade accordingly.
A well-structured process addresses re-trade risk structurally: the LOI negotiates loss-of-exclusivity provisions tied to material term changes, the advisor maintains active backup relationships, and the timeline is controlled to prevent the fatigue-driven pressure that makes re-trades effective. Sellers in one-off deals have none of these protections.
The LOI Is Not the Deal — It Is the Starting Point for the Re-Trade: In a one-buyer scenario, the LOI should be read as an option the buyer has purchased on your business at a price they intend to renegotiate. The exclusivity period they have secured is the time window in which they will execute their real pricing strategy. A competitive process with maintained backup buyer relationships is the only structural defense against this dynamic.
Sellers focus on EBITDA multiple. Acquirers focus on deal structure. These are not the same thing — and the gap between them is where sellers in one-off deals lose enormous real money. A 7.0x offer with a 30% rollover equity requirement, a 24-month earnout, and a 15% escrow holdback is materially worse in real proceeds than a 6.5x all-cash offer with no earnout and a 10% standard escrow. The headline multiple is often the least important number in the LOI.
Buyers who approach sellers directly know this. They anchor the seller's expectations on the multiple, then recover value quietly through structure. Rollover equity sounds like "upside" but is illiquid minority equity in a company the seller no longer controls, with no guaranteed exit timeline, no liquidity rights, and minority protections that are often far weaker than they appear at signing. Earnouts sound like "performance-based additional payment" but are routinely structured around metrics that are difficult to achieve — or that the buyer can manipulate through post-close cost allocation and operational decisions.
Earnouts Are Rarely Paid in Full: According to SRS Acquiom's 2024 M&A Claims Insights Report — derived from analysis of more than 850 private-target acquisitions totaling approximately $168 billion — outside of life sciences transactions, just over half of deals with earnout provisions see any payout at all. When zero-payout deals are included, sellers collect on average approximately 21 cents for every dollar of earnout structured into their deal. For deals that pay anything, the average is roughly 50 cents on the dollar. In healthcare services acquisitions, earnout metrics are frequently tied to EBITDA targets the buyer influences through post-close cost allocations and integration decisions.
Earnout usage is rising: Approximately one-third of private M&A deals in 2023 included earnout provisions — up from 21% the prior year — driven by buyers seeking to defer real purchase price while maintaining headline optics. Sellers who receive LOIs with earnouts should treat every earnout dollar as speculative and evaluate the deal exclusively on its cash-at-close structure.
Rollover Equity Risk: Rollover equity places the seller back into minority ownership in an entity controlled entirely by the acquirer. If the platform underperforms, is recapitalized, or sells at a distressed valuation, rollover equity can be worth a fraction of its stated value — or nothing. Buyers present rollover as upside participation. The accurate description is: illiquid minority equity in a company you no longer control, with no guaranteed path to liquidity for 4–7 years.
The Process Advantage on Structure: In a competitive process, buyers compete on structure as well as price — because they know another bidder may offer cleaner terms. Mihama's process explicitly solicits and compares structural terms across all bidders, giving sellers a real-time picture of what the market considers standard and what represents buyer overreach. That comparison is impossible without a process. Without it, you are evaluating a buyer's structure against your own intuition, not against the actual market.
Beyond headline price and deal structure, the definitive purchase agreement in a one-off transaction is drafted by the buyer's legal team — and it reflects the buyer's interests at every point where the seller lacks sufficient leverage to push back. Most sellers in their first transaction have no basis for knowing what "market" looks like for reps and warranties survival periods, indemnification caps, basket thresholds, non-compete radius and duration, or working capital peg methodology. That ignorance is expensive.
Acquirers who execute multiple transactions per year have refined purchase agreement templates engineered to maximize their post-close protection while simultaneously maximizing the seller's liability exposure. According to the American Bar Association's 2024 M&A forecast analysis, approximately 33% of all post-closing disputes in North American private M&A transactions stem from alleged breaches of seller representations and warranties — with financial statement accuracy and compliance with applicable laws among the most frequent categories. The seller who does not understand their rep and warranty exposure before signing discovers it only when the buyer brings a claim.
Working Capital Peg Manipulation: The working capital peg is the agreed-upon level of net working capital the seller must deliver at close. Per Whiteford Taylor & Preston's analysis of private M&A transaction data, 55% of deals result in a pro-buyer downward working capital adjustment — meaning the seller's closing proceeds are less than the headline purchase price. Buyers set the peg methodology aggressively, then use the 60–90 day post-close true-up to recover additional purchase price through accounting disputes the seller is poorly positioned to contest without an experienced advisor.
Reps & Warranties Insurance (RWI): RWI has become standard practice in institutional healthcare M&A. When present, it dramatically reduces the seller's post-close exposure by shifting indemnification risk from the seller's escrow to an insurance policy. Sellers in one-off deals are frequently never informed that RWI exists as an option. In competitive processes, Mihama's deal team structures RWI as a standard feature — protecting the seller's proceeds from post-close claims that buyers in unadvised deals routinely extract from escrow.
Non-Compete Scope: Market standard in healthcare M&A is generally 3 years and 15–25 miles per clinic location. Buyers in one-off transactions frequently request 4–5 years and 50+ miles — provisions that functionally prohibit return to clinical practice in the seller's own market for years post-close. In a process, these provisions conform to market norms because buyers know outliers are flagged against competing term sheets.
Indemnification Basket and Cap: The basket is the deductible before a claim can be brought. The cap is the maximum aggregate liability. Market standard caps general rep indemnification at 10–15% of enterprise value. One-off deal buyers frequently push to 20–30%. On a $10M deal, that gap represents $500K–$1.5M of additional potential post-close liability the seller unknowingly accepted.
How a Competitive Process Normalizes Contract Terms: When multiple buyers compete for the same asset, their legal teams draft toward market-standard provisions — because buyers know seller-unfavorable outliers will be flagged against competing term sheets by the seller's advisor. Mihama reviews and benchmarks all term sheets, negotiating back provisions that deviate from market. That comparison is only possible with a process. A seller in a one-off deal has nothing to compare against.
In a one-off deal, the buyer sets the pace of diligence. They decide when to deliver the quality of earnings request, when to schedule management calls, when to circulate the draft purchase agreement, and when to surface concerns requiring additional documentation. This control is not neutral — it is strategic. Buyers who extend diligence beyond its natural scope do so deliberately: time creates seller fatigue, and seller fatigue creates negotiating concessions.
A deal that should close in 90 days from LOI commonly extends to 150–180 days in one-off transactions where the buyer faces no competition and no deadline pressure. Every week the process extends, the seller becomes more emotionally, financially, and logistically committed. Staff have been informed. Lawyers have been paid. The seller has mentally exited. These psychological conditions are not accidental. Buyers in one-off transactions understand that an exhausted, committed seller is a seller who will accept terms they would have rejected at the start of diligence.
A competitive process operates on a seller-controlled timeline from day one. Mihama sets the calendar: bid deadlines, management presentation windows, diligence data room access periods, and final LOI submission dates. Buyers must conform to that timeline or exit the process. This produces dramatically different buyer behavior than the open-ended timeline of a one-off deal.
When buyers operate under defined deadlines with competing bidders simultaneously active, they prioritize. They conduct focused diligence rather than exploratory diligence. They submit responsive and complete offers rather than low-ball openers they intend to renegotiate. They treat the seller's management team with appropriate professional respect because they understand that access is earned and can be revoked if they are not competitive.
In a one-off deal, the buyer has all the time in the world — because they have no competition and no deadline. That asymmetry flows directly into the final terms of the transaction. Sellers who control the timeline consistently achieve better outcomes than sellers who cede it. Controlling the timeline requires a process. There is no other mechanism.
Time Is Not Neutral in an M&A Transaction: Every additional week of diligence in a one-buyer process is a week during which the buyer learns more, the seller commits further, and the seller's alternatives grow fewer. The passage of time in a proprietary deal is systematically advantageous to the buyer. In a competitive process, both parties work toward the same deadline and the seller retains the ability to redirect to competing bidders at any point before exclusivity is granted. That structural difference alone is worth millions in outcome quality.
In a one-off deal, sellers rarely conduct meaningful diligence on the buyer's ability to close. A buyer can be genuinely enthusiastic, run months of diligence, negotiate a purchase agreement — and still fail to close, due to financing contingencies, debt market conditions, LP approval requirements, or internal fund dynamics that the seller was never made aware of. This risk is not theoretical. Failed transactions in private healthcare M&A have increased in recent years as rising interest rates, PE fund lifecycle dynamics, and regulatory scrutiny have introduced financing and approval complexity that did not exist during earlier low-rate cycles.
In a one-off deal, you typically learn a buyer cannot close when the closing deadline is missed — after you have invested six months of time and significant professional fees, your staff has been informed, and competing buyers have moved on. At that point, restarting the sale process means approaching the market as a seller who has already been under LOI and failed to close — a dynamic that signals risk to prospective buyers and frequently results in lower offers in a re-launched process.
Mihama's process qualifies every bidder for financial capacity, transaction history, regulatory standing, integration track record, and debt financing before management access is granted. This qualification is not a formality — it is a substantive assessment of whether a buyer can actually close at the terms they are offering, within the timeline they are proposing. Buyers who cannot demonstrate financing certainty, or who have a history of re-trading, delayed closings, or failed integrations, are identified before the LOI is signed — not after.
A competitive process also provides the seller with a portfolio of qualified buyers, not a single untested counterparty. If the leading buyer encounters a financing or regulatory issue, backup bidders are immediately available to reengage. This structural redundancy is impossible in a one-off deal. Once a seller signs an exclusive LOI with a single buyer, they have no fallback — and no mechanism to determine, until the deal either closes or collapses, whether their chosen buyer was actually capable of performing.
Buyer qualification matters most in healthcare transactions because of regulatory complexity. Changes of ownership in PT practices may require state licensure notifications, CLIA transfers, Medicare and Medicaid billing number transitions, and commercial payer credentialing. Buyers without direct experience navigating these requirements in the relevant states introduce timeline and regulatory risk that an unqualified buyer may be entirely unequipped to manage.
Enthusiasm Is Not Execution Capacity: A buyer who contacts you directly has demonstrated interest, not capability. The ability to sign an LOI requires only confidence and negotiating skill. The ability to close requires financing, regulatory compliance, operational integration capacity, and institutional approval at multiple levels. Mihama's qualification process surfaces these distinctions before exclusivity is granted — protecting the seller from investing months in a buyer who cannot perform.
A properly structured competitive process does not simply attract multiple buyers — it engineers conditions under which buyers compete on price, structure, and terms simultaneously, under a seller-controlled timeline that prevents the information asymmetry, re-trade risk, and timeline fatigue that buyers exploit in one-off transactions. Mihama's process begins with a comprehensive financial recast that maximizes the adjusted EBITDA the market underwrites, followed by confidential outreach to the full universe of qualified strategic and financial acquirers capable of transacting at the relevant scale.
The process controls information release, manages buyer access through structured Q&A and management presentations, and drives first-round and final-round bids on parallel timelines — creating competitive tension at each stage. The result is a seller who knows precisely what the market will pay, under what conditions, and on what terms — and who can select among competing offers rather than accept or reject a single one with no basis for comparison.
Price Discovery: A one-off offer reflects what one buyer is willing to pay. A process reveals what the market pays — which is consistently higher because competition forces every buyer to sharpen their offer. The difference is real information that only exists when multiple sophisticated buyers evaluate the same asset simultaneously.
Re-Trade Prevention: Competitive processes include structural protections — loss-of-exclusivity provisions, maintained backup relationships, and controlled diligence timelines — that dramatically reduce the frequency and magnitude of re-trade attempts. Sellers in one-off deals have none of these mechanisms.
Structural Terms: Buyers in a process offer cleaner structures — higher cash at close, reduced or eliminated rollover equity, fewer earnout provisions — because they understand these structural advantages may be the deciding factor when multiples are similar. Sellers in one-off deals receive whatever structure the buyer offers, with no benchmarking and no alternative.
Contract Term Quality: When multiple buyers compete and each knows the seller's advisor is benchmarking term sheets, non-competes normalize, indemnification caps conform to market, survival periods shorten, escrow amounts become standard, and RWI becomes available. These improvements directly protect the seller's financial position for years post-close.
Post-Close Confidence: Sellers who complete a competitive process know they received market value. Sellers who accept a one-off offer often spend years wondering. That uncertainty represents the real, quantifiable difference between what they received and what a process would have produced.
The Seller's Fundamental Right: You have spent years building your practice. The value embedded in that business belongs to you. An acquirer who approaches you directly is not doing you a favor — they are attempting to acquire your life's work before you know what it is worth. Running a process is not adversarial. It is the mechanism by which the true market value of what you built is discovered and captured. Every dollar left on the table in a one-off deal is a dollar the buyer — not you — keeps.
In a one-off deal, a buyer operates entirely on their own timeline. They initiate contact when it suits their acquisition calendar, conduct preliminary analysis at their own pace, and — once they have captured the seller's attention — allow the process to drift as long as their internal workload and priorities dictate. There is no external force compelling them to move. There is no deadline. There is no cost to delay. The result is that sellers in one-off deals wait: wait for the next diligence request, wait for the draft LOI, wait for the management call, wait for the markup on the purchase agreement. The buyer is never in a hurry because they have no reason to be. You have no alternatives. They have all the time in the world.
This dynamic is not accidental. Buyers who conduct direct outreach understand that a seller who is waiting for them is a seller who is not talking to anyone else. Every week that passes without competing buyer contact makes the one-off buyer's position stronger — and the seller's weaker. The buyer's silence in the early stages is not disinterest. It is patience. They know that time, in a proprietary deal, is on their side.
A competitive process inverts the timeline dynamic entirely. When Mihama launches a process, every qualified buyer receives the same information package on the same date, with the same deadline for first-round bids. The message is unambiguous: this process is moving on a defined schedule, multiple parties are participating, and any buyer who fails to submit a responsive bid by the deadline exits the process permanently. Other buyers — equally qualified, equally capitalized — are preparing their offers right now.
This creates buyer urgency that is structurally impossible to replicate in a one-off engagement. The buyer who would otherwise spend months slowly building their thesis is now working on your timeline, not theirs. Their senior deal team is fully engaged. Their debt underwriting is expedited. Their legal team is on standby. Their bid reflects the sharpest multiple they can support — not the exploratory number they would have opened with in a leisurely bilateral conversation.
The forcing function changes buyer behavior at every level: PE associates who might have weeks to prepare a memo now have days. Investment committees that might approve a deal at their next quarterly meeting are convened on an accelerated basis. Lenders who receive deal packages on the buyer's timeline receive them on the seller's. The entire acquisition apparatus of the buyer — which in a one-off deal moves at the buyer's convenience — is now subordinated to the seller's process calendar.
Critically, this forcing function also prevents re-trades. A buyer who submits a final bid in a competitive process has committed to that number in a context where the seller has alternatives. Walking back that number post-LOI carries the real risk that the seller exercises their loss-of-exclusivity provision and returns to another bidder. That risk — which is zero in a one-off deal — is the single most effective deterrent against late-stage price renegotiation.
Time Is a Negotiating Asset — and in a One-Off Deal, the Buyer Owns It: In a direct, one-off engagement, the buyer controls the clock and uses that control strategically. The seller waits, commits, and eventually accepts terms shaped by the buyer's preferred pace. A competitive process transfers ownership of the timeline to the seller — and with it, the urgency, the pricing tension, and the structural leverage that only exist when a buyer knows they must move or lose the deal. That shift, more than any individual negotiating tactic, is what separates a process outcome from a one-off outcome.
The following case study is drawn from a real Mihama transaction. It illustrates what happens when a seller who has received a direct one-off approach engages Mihama to run a competitive process instead — and what the difference in outcome looks like in concrete financial terms.
The risks described in this paper are not anecdotal. They are documented outcomes from thousands of private-target acquisitions studied by institutional M&A advisory firms, shareholder representative organizations, and legal research bodies. The following data represents real, measurable financial consequences that sellers in one-off, unadvised transactions experience at materially higher rates than sellers who use experienced advisory in properly structured competitive processes.
Average earnout recovery per dollar promised, across all non-life-sciences private-target M&A deals with earnout provisions. When zero-payout deals are included, sellers collect approximately 21 cents on the dollar of earnout structured into their deal. Even for deals that pay anything, the average is only approximately 50 cents on the dollar. Buyers structure earnouts they do not intend to pay in full. The data is unambiguous.
Of private M&A deals result in a pro-buyer downward net working capital adjustment — reducing the seller's actual cash proceeds below the headline purchase price at close. Only 35% of deals result in a pro-seller positive adjustment. Buyers set peg methodology aggressively in the LOI and use the 60–90 day post-close true-up to recover additional value through accounting disputes the seller is poorly positioned to contest without experienced advisory.
Of post-closing disputes in North American private M&A transactions arise from alleged breaches of seller representations and warranties. Financial statement accuracy and GAAP compliance are the most frequent categories, followed by material contracts and compliance with applicable laws. Understanding rep and warranty exposure — and negotiating appropriate survival periods, caps, and RWI availability — is essential to protecting post-close proceeds.
Private M&A deals in 2023 contained earnout provisions — up from approximately 21% the prior year, the highest rate in recent history. The increase reflects buyers' effort to defer real purchase price during valuation uncertainty while preserving headline optics. For sellers, the trend makes understanding earnout achievement probabilities more critical than ever before accepting any LOI that includes one. RSM US research confirms earnout disputes are among the most contested and costly post-close M&A conflicts.
The table below illustrates how key deal terms differ between sellers who accept one-off offers and those who run a structured process. These ranges reflect Mihama's transaction experience in the healthcare and physical therapy M&A market and are corroborated by ABA Private Target M&A Deal Points studies, SRS Acquiom transaction data, and published M&A advisory research. Where third-party data is specifically cited, the source is noted.
| Deal Term | One-Off Offer (Typical) | Competitive Process (Market) | Seller Impact |
|---|---|---|---|
| EBITDA Multiple (PT Practices) | 3.0x – 5.5x Low End | 5.5x – 10x+ (scale-dependent) Market Rate | 1–4x multiple gap = $2M–$8M+ difference on typical multi-location practice EBITDA |
| Cash at Close | 65%–75% of headline price High Rollover | 85%–100% Market Standard | Illiquid rollover equity vs. liquid, deployable proceeds at close |
| Rollover Equity Requirement | 20%–35% Aggressive | 0%–15% Market Standard | Minority equity in an entity you don't control; illiquid 4–7 years with no guaranteed exit |
| Earnout Inclusion | Frequently required; 12–24 months High Risk | Rare or negotiated away Preferred | ~21¢/dollar collected on average (SRS Acquiom 2024). Most earnout dollars never paid. |
| Escrow / Holdback Amount | 12%–20%; 24-month hold Above Market | 10%; 12–18 months Market Standard | $500K–$1M+ held longer, subject to buyer-initiated claims under aggressive reps and warranties |
| Indemnification Cap (General Reps) | 20%–30% of EV Buyer-Favorable | 10%–15% of EV Market Standard | $500K–$1.5M+ more in post-close seller liability exposure per $10M of deal value |
| Rep Survival Period (General Reps) | 24–36 months Extended | 12–18 months Market Standard | Extended window for claims; 33% of post-close disputes involve rep breaches (ABA 2024) |
| Indemnification Basket (Deductible) | $25K–$75K Low — Buyer Advantage | $100K–$250K (size-dependent) Market Standard | Low baskets allow claims on smaller issues; increases post-close dispute risk and legal cost to seller |
| Non-Compete Duration | 4–5 years Aggressive | 3 years Market Standard | 1–2 additional years of professional restriction beyond commercial necessity |
| Non-Compete Radius | 50+ miles per location Overbroad | 15–25 miles per clinic Market Standard | Functional exclusion from the seller's own geographic market for the duration of the covenant |
| Reps & Warranties Insurance (RWI) | Rarely offered or structured Seller Unprotected | Standard in institutional transactions Seller Protected | RWI shifts indemnity risk to the insurer; dramatically reduces seller's post-close financial exposure |
| Working Capital Peg Methodology | Buyer-set; aggressive; high true-up risk Recovery Risk | Advisor-negotiated; methodology defined pre-LOI Protected | 55% of deals result in pro-buyer WC adjustment (per industry data). Proper peg methodology protects seller proceeds. |
| Timeline and Diligence Control | Buyer-controlled; open-ended; re-trade risk Buyer Advantage | Seller-controlled; defined milestones; backup buyers maintained Seller Protected | Seller timeline control prevents fatigue-driven concessions, re-trades, and leverage transfer to buyer |
| Buyer Qualification | Untested; financing uncertainty; no fallback Execution Risk | Qualified for financing, track record, and regulatory capacity; backup buyers maintained Protected | Unqualified buyers who cannot close leave sellers with a failed process, professional fees incurred, and a disadvantaged re-launch |
"The buyer who calls you first is not your partner. They are a sophisticated acquirer who has decided your business is worth acquiring — on their terms, before you know your options. The most consequential decision you will make in your transaction is not which buyer to choose. It is whether you let the market decide, or let one buyer decide for you."
If you receive a direct approach from an acquirer — whether unsolicited call, letter of interest, or informal conversation at a conference — specific steps protect your position and preserve your ability to run a process. These steps do not require you to be adversarial with the prospective buyer. They simply ensure you are not foreclosing options before you have the information needed to make a sound decision about the single largest financial transaction of your life.
A buyer who presents you with an LOI, term sheet, or exclusivity agreement in an early conversation is attempting to lock up the deal before you have time to explore alternatives. Signing exclusivity with one buyer eliminates your ability to run a process and removes the re-trade's core counterweight. If a buyer pressures you to sign quickly, treat that urgency as a signal — not a courtesy. Speed at this stage benefits only the buyer.
Sharing your financials, payer mix, patient volume, or operational data with a single buyer before a process is structured gives that buyer the information advantage they need to price against you. Information flows one way in a one-on-one conversation — NDA or not. Protect that information until a proper framework is established. Buyers who insist they must have your financials before the LOI are confirming exactly how much leverage that information gives them.
The window between a buyer's initial contact and your substantive response is the window in which you can engage an advisor and transition from a one-off conversation into a structured process. Once you have responded substantively and the buyer has set the terms of engagement, recovering that ground is very difficult. The most valuable thing an advisor does at this stage is establish the framework before the buyer does — and identify which other buyers are simultaneously active in your market.
Buyers frequently tell sellers that "we prefer off-market deals where we can offer more." This framing is false. Off-market means the buyer pays less — not more — because there is no competition. The premium for off-market exclusivity accrues to the buyer, not the seller. Any buyer who claims they will pay more to avoid a process is asking you to trust their valuation more than the market's. Transaction data does not support that trust.
If you do not know your adjusted EBITDA — calculated on an accrual basis with all legitimate management add-backs applied and owner compensation properly normalized — you cannot meaningfully evaluate any offer you receive. The offer will be anchored to the buyer's conservative estimate of your financials. Mihama's financial recast, completed before any buyer engages, ensures the EBITDA a buyer underwrites is the maximum defensible figure — not the buyer's internal low estimate.
If one buyer has identified your practice as an attractive acquisition target, others have too. Strategic and PE-backed acquirers in healthcare track the same markets, geographies, and EBITDA thresholds. The buyer who called you is not uniquely interested — they were simply first. A process surfaces the others and forces all of them to compete. The one-off offer you received is the opening bid, not the market price. You will only know the market price after you run a process.
A buyer's urgency, enthusiasm, and flattery are not indicators of what your practice is worth — they are indicators of how much the buyer wants it. A buyer can be genuinely enthusiastic and still be offering you well below market value. Enthusiasm does not translate to price discovery. What produces price discovery is competition. Do not mistake a buyer's energy for evidence that their offer is fair. The only way to know what your practice is worth is to find out what multiple buyers will pay for it simultaneously.
In a one-off deal, sellers rarely conduct meaningful diligence on the buyer's ability to actually close the transaction. Mihama's process qualifies every bidder for financing capacity, track record, and regulatory compliance before management access is granted. A buyer who cannot close — or who has a history of re-trading, delayed closings, or failed integrations — should be identified before the LOI is signed, not six months later when all other buyers have moved on.
Every one-off offer, no matter how flattering it sounds, is a buyer's best attempt to acquire your business before competition establishes what it is actually worth. The appropriate response is not to negotiate harder within the one-buyer framework — it is to introduce competition that creates an entirely different framework. That is what a process does. Mihama runs that process on your behalf, at no retainer, paid only at close — ensuring that every dollar the market is willing to pay for what you built is the dollar you actually receive.
One-off offers are not a shortcut to a good outcome. They are a mechanism by which sophisticated acquirers capture the value you have built — at a price, structure, and set of contract terms that reflect their interests, not yours. The price difference between a one-off deal and a competitive process is real and quantifiable. The structural difference — in cash at close, rollover requirements, and earnout exposure — is often equally significant. And the post-close risk difference — in working capital adjustments, rep survival periods, indemnification exposure, RWI availability, and re-trade protection — can affect your financial position for years after the wire clears. Mihama exists to ensure that when you sell the business you have spent years building, the full market value of that business comes to you. That requires a process. It requires competition. And it requires an advisor whose interests are aligned with yours — paid only when you close, only when the outcome is right. If you have received an approach from an acquirer, the time to engage Mihama is now — not after you have responded substantively to that buyer.
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