By Brad MacLiver
Authorship and profile at Google
When a GA pharmacy or drug store is being sold, seldom does the buyer pay “out of pocket” cash for the acquisition. Even when cash is available,Georgia
Typical acquisitions take 6-9 months to complete, so the pharmacy seller will need the buyer to provide some proof up front about their ability to close the transaction. Acquisitions will involve many hours of due diligence and negotiation, so the process should involve qualified parties.
Along with the buyer and seller the acquisition will involve attorneys, accountants, lenders, valuation companies, industry specialists, along with others. No one wants to pursue 6-9 months of work involving a variety of highly paid professionals without having some confidence of theGeorgia
The process will begin with determining the value of the business. There are many companies that offer valuation services. However, pharmacies inGeorgia
In order to complete a valuation the selling company needs to provide up-to-date data. Lenders will not accept old data, or a sellers “gut feeling.” Lenders need to make a decision to finance based on sound and verifiable information.
Structuring the transaction is extremely important. The seller of course wants as much money as possible and wants cash. The buyer needs to spread out the debt service and wants to have as little cash as possible invested in the acquisition.
Georgia Pharmacies and drug stores are in an industry where it is more difficult to obtain business loan due to the majority of the value in a pharmacy in GA is the customer files and not hard assets. Therefore, for the acquisition to be financed a lender will need a strong understanding of the industry and what, beyond the collateralized assets, the company offers to reduce the perceived risk.
Pharmacies in GA have typically been known as being stable, profit-generating businesses. Despite this, they may look worse to a buyer because they are usually in leased locations, and their furniture, fixtures, and computers will only provide $15-20,000 of collateral when the buyer could be requesting a million dollar loan. A lot a pharmacy's money is tied up in inventory, but lenders view their small pills as an easy asset to move out the door in the event of default. These circumstances cause many lenders to avoid loaning money to these traditional money-making businesses. To have a successful transaction, it requires a lender who understands the pharmacy industry.
Tips regarding GA pharmacy acquisitions and finance:
1. Attorneys and CPAs who have been representing the pharmacy seller for many years may see the transaction as putting themselves in a position of losing a client when the business is sold. Make sure they are working diligently on the transaction and are not slowing or undermining the process
2. SinceGeorgia
3. All financial information needs to be current. Over the lengthy process the data supplied to both the buyer and the lender will need to be updated on a continuous basis. Things can change drastically during a nine month period and the pharmacy seller in GA will need to continually prove the financial condition of the company.
When pursuing “pharmacy acquisition finance,” for the best chance of success, make sure the valuation company and the lender have expertise in that industry. Choose a company that has the pharmacy experience and expertise, and is a direct correspondent with lenders who understandGeorgia
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Authorship and profile at Google
When a GA pharmacy or drug store is being sold, seldom does the buyer pay “out of pocket” cash for the acquisition. Even when cash is available,
Typical acquisitions take 6-9 months to complete, so the pharmacy seller will need the buyer to provide some proof up front about their ability to close the transaction. Acquisitions will involve many hours of due diligence and negotiation, so the process should involve qualified parties.
Along with the buyer and seller the acquisition will involve attorneys, accountants, lenders, valuation companies, industry specialists, along with others. No one wants to pursue 6-9 months of work involving a variety of highly paid professionals without having some confidence of the
The process will begin with determining the value of the business. There are many companies that offer valuation services. However, pharmacies in
In order to complete a valuation the selling company needs to provide up-to-date data. Lenders will not accept old data, or a sellers “gut feeling.” Lenders need to make a decision to finance based on sound and verifiable information.
Structuring the transaction is extremely important. The seller of course wants as much money as possible and wants cash. The buyer needs to spread out the debt service and wants to have as little cash as possible invested in the acquisition.
Georgia Pharmacies and drug stores are in an industry where it is more difficult to obtain business loan due to the majority of the value in a pharmacy in GA is the customer files and not hard assets. Therefore, for the acquisition to be financed a lender will need a strong understanding of the industry and what, beyond the collateralized assets, the company offers to reduce the perceived risk.
Pharmacies in GA have typically been known as being stable, profit-generating businesses. Despite this, they may look worse to a buyer because they are usually in leased locations, and their furniture, fixtures, and computers will only provide $15-20,000 of collateral when the buyer could be requesting a million dollar loan. A lot a pharmacy's money is tied up in inventory, but lenders view their small pills as an easy asset to move out the door in the event of default. These circumstances cause many lenders to avoid loaning money to these traditional money-making businesses. To have a successful transaction, it requires a lender who understands the pharmacy industry.
Tips regarding GA pharmacy acquisitions and finance:
1. Attorneys and CPAs who have been representing the pharmacy seller for many years may see the transaction as putting themselves in a position of losing a client when the business is sold. Make sure they are working diligently on the transaction and are not slowing or undermining the process
2. Since
3. All financial information needs to be current. Over the lengthy process the data supplied to both the buyer and the lender will need to be updated on a continuous basis. Things can change drastically during a nine month period and the pharmacy seller in GA will need to continually prove the financial condition of the company.
When pursuing “pharmacy acquisition finance,” for the best chance of success, make sure the valuation company and the lender have expertise in that industry. Choose a company that has the pharmacy experience and expertise, and is a direct correspondent with lenders who understand
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