About the Company

VMG Health is a consulting firm serving healthcare clients across the United States, from small practices to large health systems. Since 1995, the company has developed deep expertise in the regulatory, operational, legal, and logistical challenges facing healthcare organizations. As “the leading healthcare consulting firm for business performance,” VMG Health provides M&A advisory, litigation and dispute resolution, coding audits and compliance, medical group solutions, and other related offerings. They’ve also built a strong reputation, with a Net Promoter Score of 92%, 35% higher than the industry average. Today, VMG Health employs more than 300 people and supports more than 2,600 active clients across multiple healthcare sectors.

Challenges

Justin Cueto joined VMG Health as Director of M&A & Strategic Finance following the firm’s partnership with a private equity sponsor. By that time, the firm had completed five M&A transactions. Its acquisition strategy centered on filling service-line gaps for its provider clients, with the eventual goal of completing three to four transactions annually. 

Now responsible for the firm’s entire M&A process, Justin began working to understand the company’s previous deals, as well as its due diligence and integration workflows. This proved challenging without a single source of truth for deal context; he was soon digging for transaction information across various inboxes, ShareDrive folders, Excel spreadsheets, and Word documents. 

None of the data was connected or updated in real time, and Justin wasted hours piecing together a full picture of VMG Health’s M&A strategy and operations. 

“If we were going to acquire anywhere from three to four targets a year, we would have been wasting a lot of time going to different data rooms and Excel files,” said Justin. 

Typically, five to seven leadership team members were involved in each deal, and that same team handled both integration and diligence. However, those stages were completely siloed, and diligence risks or issues didn’t always make it into integration plans, making an already challenging process even harder.

Negative Business Impacts

Inability to Scale: VMG Health’s private equity sponsor set a strategic goal of completing three to four transactions every year. However, that target was unattainable because each deal relied heavily on siloed resources and manual processes. 

Disconnected Workflows, Delayed Revenue: Diligence and integration, while managed by the same team, were tracked in separate places, leading to re-diligencing deals post-close and delaying revenue recognition. 

‍Hours Lost to Scattered Deal Context: Critical deal information, such as pre-LOI research, sourcing background, strategic rationale, prior communications, and potential risk factors, wasn’t stored in a single location, forcing team members to waste time gathering the relevant data.

Solution

To manage acquisitions at scale, VMG Health would need a dedicated system to handle at least part of its M&A workflows. “The light bulb went off in my head, and I thought, I’d love to just go to one single spot and have all the diligence requests, data, all the interesting things that happened with the deal,” Justin said. Ideally, this system would support information requests, house a basic integration plan, and streamline communication between parties. In effect, it would do the work of a junior team member. 

As a listener of the M&A Science podcast, Justin was already familiar with DealRoom and its Buyer-Led M&A™ approach. After reaching out to the DealRoom team, Justin saw the M&A Operating System in action and soon realized it was the M&A tool he’d been searching for. When he pitched DealRoom to VMG Health’s CEO, approval came quickly given the obvious potential ROI. With DealRoom’s functionality and ease of use, Justin could continue to manage VMG Health’s entire M&A lifecycle as a team of one. 

“We use DealRoom instead of a large, robust M&A team, and it's allowed us to generate a positive ROI on that dollar spend.” - Justin Cueto, Former Director of M&A & Strategic Finance

Why DealRoom?

Full M&A Lifecycle Functionality: DealRoom streamlines the entire M&A process, from pre-LOI research and sourcing through integration and final handoff. For a one-person team, the system provides the support and tools required to manage the M&A lifecycle from “cradle to grave” without adding headcount. 

Integrated Workflows: DealRoom brings diligence and integration together in one place, eliminating the need for separate plans and task lists in different Excel files or shared drives. 

Single Source of Truth: All deal data, from the deal thesis to the integration plan, automatically ties into the virtual data room (VDR), saving significant time and manual work. Team members know exactly where to go for anything related to M&A, eliminating potential confusion.  

Streamlined Communication: No more endless email threads or manual document updates. In DealRoom, stakeholders can tag each other on diligence tasks and files and assign workflows to specific individuals, greatly reducing the risk of key items falling through the cracks. 

“DealRoom has changed our M&A process drastically. We are essentially using it for everything related to M&A.” - Justin Cueto, Former Director of M&A & Strategic Finance

Outcomes

Bespoke Deal Management: Justin worked with the DealRoom team to build a custom deal management tracker, which allows him to manage multiple risk mitigation plans and document VMG Health’s investment thesis and strategic rationale for every transaction. 

Time Saved: These workflows are now fully integrated in DealRoom. Diligence findings inform the integration plan, and potential integration risk areas are thoroughly explored during diligence. 

Continuous Optimization of M&A Process: With an established single source of truth, the VMG Health team can review what went well during each transaction and identify areas for improvement. With every deal, learnings are captured and stored in the VDR for future reference. 

Hours Reclaimed from Manual Tracking: Replacing Excel with DealRoom eliminated the manual updating and reconciliation that ran alongside every deal.

Growth Without Added Headcount: Full M&A lifecycle support in one system meant VMG Health scaled deal volume without increasing hiring spend.