Big Box Purchase Offers: Advisors You Need
Independent pharmacy owners have a lot to consider when receiving purchase offers. Ollin Sykes discusses the importance of two professional advisors that independent pharmacy owners will want to connect with when receiving offers to sell the pharmacy. Watch this video to learn how a legal healthcare specialist and a CPA with pharmacy experience can help support this type of transaction.
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If you prefer to read this content, the video transcript is below.
Ollin: Pharmacies will typically continuously get offers from big box buying representatives to purchase out their pharmacy assets. I see this happen a lot. And I see in a lot of cases, sometimes they may have a bad day, bad week, bad year, and they just are fed up with it. And they say, “Oh, okay, let’s see what the offer is.”
And then of course, a buyer’s representative comes in, they begin to have a conversation. And long story short is they tell you, as a pharmacy owner, essentially what you want to hear. They will throw a price out there for potentially the prescription files to be purchased. And then the bells and whistles go off typically with pharmacists. Sometimes they don’t realize the prescription files are worth the money that’s being offered. Sometimes those numbers are ridiculously low, and I’ve seen them ridiculously high. It depends on how bad the big box wants to be in a particular community.
But if someone does potentially accept one of the offers, at least on a preliminary basis, it gets to the point of having a contract in place or at least a contract for sale of assets being issued. You need to very quickly, as a pharmacist, obtain professional help to assist you in this process. And that professional help is going to consist of two primary parties. Number one: a legal healthcare specialist who understands pharmacy transactions. This is not your attorney across the street. This is not your attorney who closed your real estate transaction or your real estate refinancings. This is somebody that works with health care transition matters. There are a number of issues that are special to this kind of transaction that you need that specialization. In addition, you need frankly a CPA who has experience in the pharmacy arena who deals with asset purchases and sales and transactions of this nature, that understands the tax effects, the business effects, and exactly how pharmacy operations work. And again, because of the specialty nature of this type of transaction, this is not your CPA that might just prepare your tax return and doesn’t understand what a DIR fee is or PBM is.
So those two advisors are part and parcel to who you need in this transaction to review the asset purchase and sale contract. Of course, once the asset purchase and sale contract is issued, your advisors should look at this document closely and advise you with respect to issues and matters they are accustomed to, and typically work with you in this process to decide what is in your best interest. So, essentially that’s the big picture macro piece here, is that if you get to the point of potentially accepting a contract, you get your advisors involved and you work with them very closely, and listen to them as they review this contract and begin to do the due diligence.