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| Medical business merger synergies and opportunities |
Context / Scope of project
Our clients were four separate medical businesses around Australia wanting to merge their businesses. Merging would allow them to sell equity in their business and also realise substantial revenue and cost synergies. We were ask to:
- Evaluate the synergies
- Identify other revenue opportunities from implementing best practice on certain levers across the broader group
- Review potential regulatory changes and the impact they could have on the larger business.
Key Insights:
- Identified significant value that could be realised through a merger
- Identified significant value that could be realised without a merger but by adopting best practices from across the 4 groups. Realising this value was not dependent on a merger but a merger made it easier to implement these changes
- Regulatory changes are possible and would have an immediate impact but most of these changes could be managed.
Outcome:
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What we did:
- Estimated the synergies from merging the businesses
- Determined a new operating model
- Determined the new organization model and structure
- Determined what functions could be merged: rent, IT, phone hardware, phone software, infrastructure, back office, utilities, drivers, marketing, recruitment etc
- Estimated cost synergies
- Identified key drivers of business value and diagnosed how each of the four businesses managed these levers. Numerous opportunities to increase value were identified
- Increasing effectiveness of medical staff
- Increasing volume per visit
- Adjusting the types of fee structure to a standardized national structure
- Reducing leakage
- Reviewed the impact on the regulatory changes.
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