The investment process begins with a Confidentiality or Non-Disclosure Agreement so that we can exchange information about our businesses. The Confidentiality Agreement is followed by:
Preliminary Due Diligence
Preliminary due diligence consists of sharing high level and some detailed information on the performance of the hospital. It generally consists of examining financial statements, case volumes, and debt associated with the facility. It may also include a review of the existing Operating Agreement and an understanding of the facility partnership dynamics, as well as other information necessary for Foundation to make an offer to invest in the hospital.
Letter of Intent (LOI) or Term Sheet
Upon review of the preliminary due diligence, a Letter of Intent or Term Sheet will be sent if Foundation decides to make an offer to invest in the hospital. This document will outline the terms and timeline under which Foundation will invest in the facility. The LOI will contemplate items such as investment level (price), based on a valuation, ownership percentage, and other material terms of the transaction. This document is negotiable and will provide for agreement on the material terms which will be the basis of a future Purchase Agreement.
NOTE: if an external valuation of the facility is required Foundation will obtain a valuation from a national company experienced in valuing hospitals, and will do so at our sole cost and expense.
Once agreement is reached on the terms of the Letter of Intent and upon execution, we will enter an exclusivity period. This is a finite and agreed to period of time, usually about 90 days, during which the parties will work together exclusively to formalize the partnership.
During the Exclusivity Period Foundation will initiate a deliberate and thorough process to better understand and analyze the details of the hospital, the business and the partnership.
Foundation will prepare, or cause to be prepared, at our expense all documents related to Foundation’s investment in the hospital. These documents may include: Purchase Agreement, Assignments, any necessary Amendments or Revisions to the Operating/Partnership agreement, and typically a new management agreement. Foundation will prepare these documents for review by your legal and financial advisors.
Foundation will be thorough in the Due Diligence and Document Preparation processes, and is committed to moving as quickly as possible so as not to delay closing.