MAU 8 | Healthcare M&A


Most people limit themselves to dedicating their life into one specific field, and subconsciously close the doors for other ventures. Being a partner in healthcare at McGuireWoods didn’t stop Attorney Scott Becker from starting his own media business and venturing into M&A. Scott joins Domenic Rinaldi to talk about the different lessons he learned as he started out in an industry that was new to him. He also shares how he was able to juggle between his business and his career. Now, with all the years he’s accumulated in the M&A field, he generously discusses his observations on how the best people work and how critical having a great team is to the flexibility and success of your business.

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Scott Becker: Lessons From A Healthcare M&A Attorney

We’d like to welcome Scott Becker to the show. Scott is a Partner in the healthcare group at the law firm McGuireWoods. He is also the Founder of Becker’s Hospital Review and Becker’s Healthcare. Scott also happens to be one of the nicest and brightest people that I’ve ever crossed paths with. His fan club appears to know no boundaries and that’s easy to understand when you experience his unique brand of positivity and energy. He’s also started his own podcast, the Becker Group Podcast. Scott, thank you for joining me. It’s such a pleasure to have you here.

Thank you, Domenic. It’s a pleasure to be with you and I appreciate it greatly.

Could you fill in for the M&A Unplugged podcast community a little bit about your background? You’re a lawyer and you started your own media company. Give us a little bit more background so people can understand the intersection between those two paths.

I have straddled two careers for a long time. I started off as a lawyer by background. I went to Harvard Law School and started in legal practice many years ago. The one core concept of legal practice is it was far better to have clients and build a practice than be a service partner. Being a service partner is a great thing. It’s just in the old days, if you didn’t have your own clients, you could be treated poorly. I never wanted to treat anybody poorly, but I wanted to have my own practice, so I had some control over my life. That was the start of the legal practice.

I did this at a large firm and I ended up in the healthcare niche. In trying to build a brand around healthcare, I started slowly and incrementally building a newsletter, conference and some other things. There’s a whole set of circumstances that led to that. Over the years, that effort at marketing my legal practice turned into a much more serious business and a large part of my professional life. The two core concepts I straddled were the practice of law as a healthcare transactional corporate lawyer and the media business, which I’ve been for many years. It’s in hospitals, health systems, health IT, surgery centers and spine.

How did your law experience help and/or hinder you in starting your own business?

When I first started the media business, it was an extension of my legal practice and closely tied to the core niche I was in, which is the Ambulatory Surgery Centers niche within health care. To a great extent for a long time, it was a great help because we were able to be the content leader around all the different things going on with mergers and acquisitions, regulatory issues and so forth related to surgery centers. I built this brand as one of the leading people in the country in terms of knowledge of surgery centers. For a long time, it was a great help to the background centered in a business that we’re doing a media company in.

How has being an entrepreneur and running your own business helped or hindered you to be a better attorney?

MAU 8 | Healthcare M&A

Healthcare M&A: You don’t need 1,000 customers. You need twenty that you treat extremely well and really take care of.


There are two things that were central to both businesses. It’s an old Jim Collins thought both in the legal business and in the media business that goes, “The whole ability to grow and scale the practice or the media business was based on hiring, cultivating and developing great people.” It’s a clear strategy and plan, but nothing gets on the strategic plan without great people. As I look at it now day-to-day, the media business is ran first and foremost by our CEO, Jessica Cole. The legal business, the healthcare department of McGuireWoods is ran first and foremost by a woman named Amber Walsh.

How do these complement each other? For a long time, the media business put me in the front and center of people that I was looking for as legal clients. Many years ago, that’s transitioned with a media business, completely stern on its own and was no longer a feeder of legal business, but its own business. In terms of the media business, anytime you’re a principal in something. Years ago, I joined the board of a company and were granted board members stock. I never understood some of these terms that we’ve talked about on the law side so much. One of the terms was waterfall. When I was granted a percentage in a company as a board member, private equity funded company, I was excited because I thought I owned 1%.

When that company had an exit event, I found that my 1% was for all practical purposes 0.5% because my dollars didn’t come out until the first equity of the owners came out. In terms of how one thing informs the others, you understand a lot of things as an agent and as a lawyer. For a long time, I practiced law directly and was involved in the deal terms day in and day out. As your principal and other things, you have a better understanding of how a lot of things play together, whether it’s things like that. I now understand waterfall fully. It’s my money that comes after everybody else’s. I understand how I want to contain legal costs and how long I want to control my lawyers instead of them controlling me. There’s a whole number of things that complement each other in terms of knowledge-base.

How did you find juggling both your law career and this media company? By all accounts, from what I’ve been able to see, exploded and I’m impressed. I’m amazed at the people that you have that come to speak at these events like presidents and past presidents. It’s amazing what you’ve been able to do with this media company.

There are 3 or 4 core things that played into it. I’m in my mid-50s. Through my 30s and 40s, I had tremendous energy and tremendous drive for it and that helped. More important than the drive and energy was I surrounded myself with magnificent people and leaders. I’m a big fan of you can’t do anything by yourself. You need great teams and leaders. The 3rd and 4th points are things that were very synergistic, but we also brought much the same core theory to both businesses. We want it to be niche-centric and customer-centric. In the law business, micro-businesses are wholly focused around healthcare. Within healthcare, it was around a few specialties like surgery center chains in hospitals and health systems and then helping private equity funds invest in health care.

The concept is you don’t need a thousand customers, you only need twenty that you treat extremely well and take care of. The media business is a similar type of thing and we did a study on this many years ago when we got serious about the media business. We’re focused on 3 to 4 niches. We’re going to go deep in those niches and it’s much the same thing. About 200 of our customers there generate 70% to 80% of the revenues. We want to be focused on making sure that those advertisers, customers and sponsors are well taken care of. It all comes back to 3 or 4 simple concepts. Number one is great people. Number two is niche-centric and number three is customer-centric. Those became the organizing principles, which made it a ton more manageable.

I’m such a big believer in having a niche focusing on a vertical that you specialize in and know well. In my previous life, I had the opportunity to be involved in a vertical. It’s amazing what you can do when you focus your energies on moving the needle in one area. You can accomplish tremendous things.

It’s much more effective as I grow into the next career and living. I’m still heavily involved in the law firm and the media. I look at new efforts, ideas and thoughts. I keep on coming back to the narrower, the better, but it takes tremendous discipline to go narrow.

It’s important to thrive and be energetic in what you do. It’s even better if surround yourself with magnificent people and leaders. Share on X

You’ve been involved in a lot of M&A transactions, buy-side and sell-side. I would love to tap into some of your key learnings and key lessons. Let’s take the buy-side first. I know this is within the context of the healthcare industry, but can you talk a little bit about the key lessons that you’ve learned and the things that you see that make the biggest difference when you’re representing a buy-side client in a transaction?

Throughout the course of my career, the best people that ran acquisition teams for the large health systems, large surgery center chains, large dialysis chains or large practice management affiliation groups are the people that we’re best at it and knew the business extremely well. They were able to assess risk relatively quickly and easily. They understand the value of what they’re buying. They also were able to take that knowledge and understanding and combine it with great personal skills to have great relationship skills with whoever they’re buying, from whoever they’re transacting with.

Those two things, to start with, understood the value and what they were buying. They have great communication and personal skills that allow them to put in perspective what counted and didn’t count. When I look at M&A from the buy-side, it’s people that are experienced and confident that they can deal well with buyers or sellers because they have clear boundaries and understandings. They understand what they’re doing and what they’re buying. They’re not sloppy buyers or smart buyers. They also have the confidence.

The great buyers also have such confidence with their own board, CEO or leadership. They know they can be confident in transacting deals. They’re not going to be undercut up top. They know and their board and leadership know that if they do ten deals and two of them were bad, it’s okay because they’re good at what they do. From the buy-side, it’s understanding the business well, great communication, great personal skills and having the confidence, your board and leadership and so forth.

You can’t hit a home run every time. It’s impossible. There are also no perfect companies out there. The ability to assess risk and know where the pitfalls might lie is important. Do you have any examples on the buy-side, Scott, where you were involved in a deal and it hit all the marks? It was a great transaction and more important than the actual transaction, why did it go well for that buy-side client?

I thought you were going the other direction, the one that went poorly.

We’ll take that as well because there’s as much to learn from that as well if not more.

In periods of time, I’ve seen the industries where you had financial buyers getting into the industry for the first time go poorly. They didn’t know the business well. They are overpaid, over-leveraged and at some point, things went south going forward. There were periods of time and there were great swaths of time that it was almost economy based where financial buyers were the strongest buyers. They are leveraging things up like crazy. They didn’t know the businesses they were investing in that well. That was a prescription for disaster.

MAU 8 | Healthcare M&A

Healthcare M&A: If you want to be the best at M&A, assess risk quickly and easily, then understand the value of what you’re buying.


I’m trying to think of the best example of things that have gone well. Best acquisitions are when a buyer has a clear plan for what they’re doing and why they’re doing it. In certain situations, it might be they’re adding market strength that is going to have a certain value. There’s a certain purpose for it, but the predominant thing I see with acquisitions that go well are the buyer has great clarity on why they’re doing it and the purpose of doing it. Where they go poorly is a situation where buyers are buying. Everybody else is chasing similar types of assets. They don’t have a clear plan for how they’re going to execute, implement and what the real compelling reason for the buy is.

I interviewed the CFO of Westell, Tom Minichiello. A key point that he brought out is you have to have a strategy going into these and you have to be clear about it. Everybody on the management team’s got to be bought in and it brings so much clarity. Once you’re out in the marketplace and you start looking at the deal flow, you can start rejecting things quickly and get down to the list that matters. That point resonates with a lot of people. On the financial side, it’s a bit of a frothy M&A market. Do you agree with that? Are you starting to see some of that financial buyer stuff pop-up again?

Certainly, it’s one of those things that I was commenting on. I was thinking about the swath of times when deals went bad. I was thinking back to a period from a long time ago. As I’m talking about it, I’m thinking, “It sounds a lot like the deal environment now,” which is always a little bit scary. There’s a tremendous amount of leverage on things. The deal environment is crazy for a whole bunch of reasons. Everybody who owns a business always has to make a decision, stay the course, sell or some other strategy, but there are only a few core strategies. Whenever the market is frothy, it gets to a spot where if you own a company, you’re in a position where the company has become a disproportionate part of your net worth. You’re always worried on a macro and micro level how well things will continue to go from 5 to 15 years, so it makes selling attractive. At the same time, there’s a crazy amount of private equity funds and money to spend. You do have those concerns. It does seem that in general, even though it’s a high leverage environment, buyers even on the financial side are far more sophisticated than they were many years ago. We’re hoping that lessens the chance of this blowing up.

We see every day how frothy the market is, but the level of sophistication seems to have gone up dramatically from several years ago. There’s no doubt about that. Let’s move over to the sell-side. What experience and key learnings can you share with the M&A Unplugged community about sell-side transactions? What do you see makes for good sell-side transactions?

On the sell-side, I’ll cover two different points. The first point and the most important thing is the seller’s clarity upfront of their goals from the transaction. This can be a company or an individual that owns a privately held business, whatever it might be. What are you trying to do? Are you trying to cash out at the maximum price? Are you trying to find a partner that will help you build the business further? Are you trying to avoid a debacle? Those are three of the potential motivations, but the most important thing on the sell-side is understanding what exactly is your purpose, what you are trying to accomplish and why.

The second thing we tell people on the sell-side is there are three parts of a transaction. First is getting your side, your management team, your ownership team and your board all on the same page. What are we wanting or trying to accomplish? The second part of a transaction is getting in sync with the other side. That might be through an auction process or individual negotiations. It’s getting in sync all the way through from the starting point of a deal to all the terms of a deal with the other side and bring them. The third part of the deal is simply all the things that are needed to execute and close a deal. The first thing as a seller is there’s great clarity as to what you want from the deal. The second big thing as a seller is understanding that there are three big parts of the deal: getting your own side in sync, getting in sync on the other side and third, all the things needed to execute on a deal.

What trends are you seeing in the healthcare M&A space? Anything in particular that stands out over the course of several years.

What’s happened in the healthcare M&A side, if you go back several years, there are different kinds of transactional stuff that we see. First, in a hospital health system side, that was incredibly hot and crazy for a period many years back where there’s a tremendous amount of consolidation in the hospital space. There’s a tremendous amount of investment throughout healthcare and a lot of vehicles we saw many years ago by private equity funds and that’s buying up all kinds of things. There’s been mega consolidation, CVS-Aetna side and some of the big payer, big pharmaceutical side or big drugstore side and pharmacy managers as well. You see at a $1 million to $100 million level, a ton of practice consolidation work again. Whether it’s in dental, derma and radiology, in a whole set of areas of gastroenterology and around practices. The healthcare deal market is crazily busy. Every time somebody says it’s good to slow down, it seems to find a new life. That’s what we’re seeing and there are different parts of the healthcare marketplace. It’s a big part of the economy, but different pockets of it are crazily busy.

Best acquisitions are when a buyer has a clear plan for what and why they’re doing it. You can’t do anything without a great team. They are fundamental. Share on X

The practice consolidation component has exploded. We see that from all angles. We don’t get particularly involved in a lot of that practice consolidation, but we know a few people that do it and they are busy at the moment. Let’s switch out of the M&A side to the owner’s side. From an owner’s perspective, what have you learned over the years about maximizing the value of your business? What are the best tools that you deployed to make sure that your business was operating at a maximum value so that when you’re out in the marketplace trying to get a deal done, you’re going to garner the best value?

We’re not a believer in dressing up a business for sale or doing those kinds of things. We’re a believer in running a solid, sound and great business. That means first and foremost, taking care of your great people to make sure your great people are excited and interested. They’re paid well and they’re treated well. You can’t do anything without a great team. It’s fundamental to everything. Everybody talks about it and it’s completely true. The second is we try and focus on where our revenues and profits are coming from. Rather than try and be all things to all people or always chasing the brand-new thing, we would spend 89% of our efforts strengthening where our revenues and profits are coming from. This comes back to a couple of concepts we talked about. It’s doubling down in the niches that are working well and also making sure we’re taking care of customers in a great way. I know it’s not a sexy answer, but we’re a big believer if you’re truly taking care of the fundamentals of your business, you’re positioned well.

The same advice goes for anybody going through a sale process ever. We always tell any client of ours going through a sale process, we would tell ourselves the same thing that sale processes when you go through them. There’s always an X percent chance that you’re going to still be operating your business. If your business goes south during a sale process, it was all leveraged with your buyers and whoever’s looking at your business. You also are in a much worse spot when the process ends to be operating your business.

We tell everybody, if you’re going through a sale process, you have to recognize your two core jobs during that period of time. One is making sure your business keeps on getting better and two is negotiating the sales process. Those are some of the things that we’ve always taken as important concepts. One, keep your focus on running a great business and sound business. We’re not a huge fan of dressing things up for sale. People go all over the board in this kind of thing, but we’re a big fan of, “If you run a great and sound business, it’ll have good value.” The second thing is that don’t take your eye off the ball on a sales process for a million different reasons.

Scott, it’s been such a pleasure to have you on the show as a guest. I see good things happening for you. I’m happy to see that because you’re such a nice individual. Are there any books that you’ve read, whether they’re business or personal books, that have resonated with you and left a real impression on you?

I grew up in a different generation. I feel like I’m dating myself, but there were two core concepts we always lived with. One, there was an old Jim Collins book called Good to Great and a couple of his other books. It focused on strategy is nice, but you can’t do anything without great people in a great team. I still think a great people in a great team gives you all kinds of flexibility to try all kinds of things, so I’m a big fan of that. The other core concept we always lived with and it goes to the niche-centric concept, was an old Jack Welch book and theory, which is the concept of you always want to be number one or two in your market. You wanted to find the market correctly. In good times, you do great but then in bad times, you were most of where your customers spend goes to. Those were the two of the overriding business books that left an impression with me over a long period of time.

How about a quick plug for your podcast?

We’ve got a couple of different podcasts through our main media company, Becker’s Healthcare. We do podcasts around the healthcare world and healthcare business in a bunch of different niches that we’re in within healthcare. Outside of healthcare and a completely separate media endeavor, we’re doing podcasts around two core areas which are business leadership and strategy and women’s leadership. More than anything else, it’s a great way to keep myself engaged and warming from people and visiting with people. It’s almost my own grad school education and visiting with people, so I’m enjoying it tremendously.

MAU 8 | Healthcare M&A

Healthcare M&A: Everybody who owns a business always has to make a decision on what strategy their business is going to use.


Scott, thank you for being here. I appreciate it.

Domenic, it’s an absolute pleasure and I appreciate you putting me on. Hopefully, you have something that you could use and you won’t cut off almost my answers out. Thank you.

M&A Unplugged podcast community, Scott Becker brought up some awesome things. If you’re looking to scale your business and maximize the value of it, he pointed out a couple of key things. First, get the right people. The team matters. There’s nothing more important than having good people in your company and then give them the reins and the freedom to go do what they do best. Also, understanding where you’re making your money and where you’re getting your profits from. Maybe cutting the things that are not generating profits and to own your space, being number one and number two and stand out as a leader.

If you’re switching over to the buy-side and if you’re looking to do buy-side deals, Scott talked about strategy and how critical it is to have the right strategy before you launch a campaign and get out into the marketplace. It’ll bring tremendous clarity once you start to sift through the deals. It’ll allow everybody to quickly determine whether a deal is in or out. To the financial buyers out there, Scott offered up a caution that it’s important for you to understand the market and not just be throwing money at deals. Understand what the downside risks are and maybe even bring in some consultants that can help you better understand that industry before you go put your money to work there.

On the sell-side, he pointed out understanding what your personal objectives are as the owner of that business. Are you looking to cash out, retire and walk away? Are you looking to recapitalize the business? A minority stake or even a majority stake is staying on in an executive position, continue to run in the business and be in sync with the entire management team. The last point that Scott made, which is critically important. We’ve seen this a number of times in our own practice, where owners take their eyes off the ball because they engage us as an M&A firm and say, “We’re going to sell this thing. They’ve told us it’s going to sell in the next year to eighteen months.” All of a sudden, the business starts to decline.

The day you decide to sell the business, double down your efforts, work harder than ever and make sure that business is in top form so that your advisors don’t have to deal with a downward trend in the middle of offering your business out on the market. Scott offered some tremendous insights. If you would like to learn more about the process of acquiring or selling a business, please visit our website at or feel free to reach out to me at [email protected]. I look forward to seeing you again on the next episode of the M&A Unplugged podcast. Until then, remember that scaling, acquiring or selling your business takes time, preparation and the proper knowledge.

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About Scott Becker

MAU 8 | Healthcare M&AScott Becker previously served on the McGuireWoods LLP Board of Partners and served for nearly 15 years as chairman of the firm’s national Healthcare department. McGuireWoods has one of the best-regarded healthcare practices in the world.

Scott is the Founder and the Publisher of Beckers Healthcare and Beckers Hospital Review and its related events and publications. Mr. Becker remains the Publisher and Chief Content Officer of Beckers HealthCare.

Scott also produces the Becker Group C-Suite Report and related media. All C-Suite efforts are wholly outside of healthcare.

Mr. Becker is a Harvard Law School Graduate and a University of Illinois undergraduate business school graduate in Finance and Accounting. He is also the author of four books and a CPA.

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