Healthcare Due Diligence Playbook

Our healthcare playbook emphasizes those areas of due diligence where issues most often arise for healthcare targets. You can customize it to meet the specific circumstances and needs of your deal.

Download Template
Start Due Diligence With DealRoom
Start Integration With DealRoom

Healthcare Due Diligence Playbook

Our healthcare playbook emphasizes those areas of due diligence where issues most often arise for healthcare targets. You can customize it to meet the specific circumstances and needs of your deal.

Download Template
Start Due Diligence With DealRoom
Start Integration With DealRoom

What are the benefits of using this template?

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What Tasks does the 

Healthcare Due Diligence Playbook

 Include

Industry

  • Infrastructure (equipment, technology, capabilities)
  • Location proximity to ancillary services and transportation (bus-line)
  • Median household income, age, workforce opportunities
  • Payer mix, CMI, and discharge data by county and diagnosis group
  • Current methods for scheduling, documentation, coding and billing
  • Adult and pediatric inpatient and ED incidence rates
  • Transfer/referral frequency and receiving facilities
  • Competing services Potential for growth Strategic fit
  • Quantity and training of additional support staff (RNs, Mid-levels and other providers)
  • Potential Key Performance Indicators (KPIs) expectations for number of visits, return on investment, etc.
  • Insurance Claims and Risk Management • OSHA and workers compensation
  • Environmental Compliance (Solid and hazardous waste, infectious medical waste, underground storage tanks, radioactive materials)
  • Medical Staff and Physician Matters
  • Admissions (inpatients)
  • Number of inpatient days and growth of inpatient days, Length of stay
  • Daily censusOccupancy rates
  • Outpatient visits and growth in visits
  • Adjusted patient days
  • Case mix percent of volume (inpatient and outpatient)
  • Commercial, self pay, Medicare, Medicaid
  • Medicare outpatient cost to charge
  • Non-Financial Due DiligenceICD 9 conversion to ICD 10
  • Compliance & risk management programs
  • Revenue CycleCoding
  • Purchasing and supply management
  • Information technologyPatient experience
  • Competition in primary market area
  • Population demographics
  • Types of services offered (Primary vs. specialized)
  • Types of physicians
  • Employees or contracted through professional services agreements (PSAs)
  • Ease of recruiting new physicians
  • Pricing power in hands of hospital or commercial payors
  • Location
  • Age and curb appeal of hospital campus
  • Physician contractingManaged care contracting

Legal

  • Organizational chart showing the corporate structure of the Target and all subsidiaries and affiliates.
  • Copies of all joint venture agreements, partnership agreements or agreements involving the sharing of profits or technology
  • Applicable governing documents for the Target and all subsidiaries and affiliates
  • List of all jurisdictions in which the Target and its subsidiaries and affiliates are licensed to do business.
  • Minutes and/or resolutions for all meetings of the board and shareholders/members, as applicable.
  • Ccopies of any contracts relating to any material acquisitions and/or divestitures of equity and/or assets
  • Summary of all related party transactions entered into in the past 3 years, including the key terms thereof and review/approval procedures applicable thereto.
  • Professional biography for each member of the management team and any other key employees identified by Buyer.
  • Professional biography for each member of the board.
  • Documentation evidencing each issuance of equity for the Target and each subisidiary and/or affiliate.
  • Summary of all oustanding options, warrants, covertible notes, and any other right entitling the holder to obtain equity in the Target or any subisidiary or affiliate.
  • Copy of all outstanding debt instruments.
  • Summary of all material litigation.
  • Summary of all permits, licenses, and other authorizations that are required for the Target to conduct its business.
  • Copies of all agreements or instruments that place restrictions or encumbrances on assets.
  • Copies of all material contracts that are terminable upon a change of control or other corporate transaction.
  • Copies of all contracts that restrict the right to conduct its business.
  • Copies of all contracts under which the Target has any continuing obligations.
  • Copies of all indemnification agreements between the Target and any officers, directors or agents thereof.
  • Summary of the Target's compliance program and copies of all policies, procedures.
  • Summary of all material regulations applicable to the Target and/or its business.
  • Please provide copies of any material correspondence with any regulatory agencies or authorities.
  • Summary of all product recalls conducted by the Target in the last 5 years.
  • Summary of all material warranty claims brought within the last 5 years.

Commercial

  • List of the top 25 customers for each of the past 3 years, including revenue.
  • List of all material customers that have ceased doing business with the Target in the past 12 months.
  • List of all material sales channel partners for each of the past 3 years.
  • Breakdown of sales and gross profits by: Product Type; Geography; Sales Channel.
  • Copies of all material customer contracts.
  • Copies of all contracts with material sales channel partners
  • Copies of all contracts with government customers.
  • Copies of all material contracts that have remaining terms longer than one year.
  • Copies of policies and procedures related to credits, returns, warranty claims, etc.
  • Copies of policies and procedures related to pricing.
  • Copies of any strategic plans.
  • Copies of any marketing/advertising plans.
  • Summary of anticipated new products and/or product improvements.
  • Copies of all brochures, presentations, sales sheet, and other advertising and/or marketing materials.
  • Product descriptions for all material products and product lines.
  • Summary of all ongoing R&D projects, including an estimated timeline for completion thereof.
  • Summary of all marketing risks and opportunities.
  • List of the top 15 suppliers for each of the past 3 years, including spend.
  • Copies of all material supplier contracts.
  • Copies of all material subcontractor contracts.
  • Summary of the policies and procedures utilized when evaluating and onboarding any new supplier or subcontractor.

Financial

  • Copies of audited financial statements and each subsidiary and affiliates.
  • Copies of unaudited financial statements.
  • Detailed description of any off-balance sheet/statement of financial position items, liabilities or obligations of any nature.
  • Schedule and description of any contingent liabilities not disclosed or referred to in the financial statements. 
  • Detailed schedule of the components of all prepaid expenses and deposits.
  • Copies of any letters issued by the Target’s auditors during the last 5 years regarding the Target’s accounting controls, method of accounting and other procedures, including all Management Representation Letters.
  • Summary of all material changes to accounting policies adopted.
  • Copies of all budgets and operating plans.
  • Copies of all financial projections.
  • Summary of any cash management controls and practices.
  • Summary of the Target's investment policies.
  • Summary of the Target's hedging policies.
  • Report reflecting all aged accounts receivable trial balances.
  • Summary of the Target’s inventory costing system and other procedures and policies related to inventory.
  • Schedule and detailed description of any reserves/contingency funds established for specific risk situations. 
  • Copies of recent bank reconciliations and bank statements for all material bank accounts. 
  • Summary of all capital expenditures planned in the next 12 months.
  • Current fixed asset register and/or copy of latest physical inventory of all equipment and other assets. 
  • Summary of all current insurance coverages and copies of all policy documents related thereto.
  • Summary of all claims made against any insurance policy within the last 5 years.

Human Resources

  • Copies of all employment agreements and indicate those affected by the transaction.
  • Copies of all consulting agreements.
  • To the extent not already provided, copies of all agreements relating to any compensation arrangements between the Target and any third party.
  • Copies of all collective bargaining agreements.
  • Copies of all confidentiality, non-competition, nondisclosure, non-solicitation, intellectual property, or similar agreements. 
  • Copies of any severance agreements under which the Target has or may have outstanding liabilities whether as a result of the proposed transaction or otherwise.
  • Summary of any current recruitment initiatives.
  • Summary of all benefits.
  • Copies of plan documents for all benefit plans.
  • Copy of the Target's compensation policy.
  • Details of bonus or other profit-related schemes and details of beneficiaries/participants. 
  • Summary of all incentive stock option plans.
  • Summary of all outstanding stock option awards and copies of any award documents related thereto.
  • List and detailed summary of all pension pension plans.
  • Summary of all litigation against the Target brought by any current or former employee.
  • Description of any court judgement or current employment tribunal award in respect of any employee dispute.
  • Headcount by function and location.
  • Schedule of any employees suspended – including reasons for suspension and salary implications. 
  • Schedule of employees dismissed in the last 12 months.
  • Schedule of all employees absent from work due to disability, long-term illness, or otherwise.
  • Schedule of employees covered by any disability legislation applicable in the jurisdiction in which the Target operates. 
  • Copies of all employee handbooks and other employee policies.
  • Detailed summary of the Target's hiring practices and policies.
  • Summary of any changes that have been agreed within the past 12 months.
  • Detailed schedule of any loans granted to employees.

Intellectual Property

  • Summary of all patents and registered trademarks held by the Target. 
  • schedule of all websites and domains owned or run by the Target and any terms and conditions related thereto.
  • Copies of all agreements under which the Target is granted the right to use IP owned by a third party.
  • Copies of all agreements under which a third party is granted the right to use IP owned by the Target.
  • Summary of any IP that is not solely owned by the Target (e.g., joint ownership, non-exclusive license, etc.), including any contracts or other documentation related thereto.    
  • Summary of any past or current instances where any third party actually or allegedly infringed on the Target's IP or where the Target actually or allegedly infringed on a third party's IP.
  • Detailed summary of any restrictions to which IP assets of the Target are subject.
  • Summary of all IP litigation in which the Target is or has been involved, including the current status or outcome thereof (e.g., court orders, settlements, etc.).
  • Summary of the Target's process for generating/developing, recognizing, capturing, and protecting (for instance, via patents) IP assets.

Information Technology

  • Details of any current and planned IT initiatives/key projects.
  • Summary of all key IT resources. 
  • Summary of the Target's policies and practices regarding the purchase and maintenance of software.
  • Summary of all material software utilized by the Target.
  • Summary of the Target's policies and practices regarding the purchase and maintenance of IT hardware.
  • Summary of all material hardware utilized by the Target, including the physical location thereof.
  • Diagram of the Target's technical architecture including servers, storage devices, operating systems and databases.  
  • Description of the networking systems utilized by the Target.
  • Summary of any specific hardware configurations utilized.
  • Summary of any vendor support or other support services to which the Target is entitled.
  • Summary of annual costs associated with maintenance of IT hardware for the past 3 years.
  • Copies of all material contracts related to software and/or IT services obtained by the Company.
  • Summary of services provided by all external IT contractors/consultants. 
  • Describe the capacity for growth in the Target's current IT environment.
  • Summary of how technology acquired by the Target.
  • Summary of the Target's support/help desk effectiveness and approach.
  • Summary of the role of  technology/IT in the Target's strategic plan.
  • Describe the level of automation made possible via the Target's IT systems.
  • Description of any web-based or internet facing applications hosted.
  • Description of the key security protocols adopted by the Target. 
  • Description of the Target's policies and procedures related to backups and/or disaster recovery.  
  • Description of the Target's data privacy policies and procedures.
  • Summary of all personal and/or sensitive information held and/or processed by the Target.
  • Results of any stress test analysis undertaken by the Target.
  • Summary of all monitoring measures/tests conducted.

Environmental, Health and Safety (EH&S)

  • Summary of all environmental investigations, citations, or notices of violation received from any environmental regulatory agency.
  • Summary of all litigation in which the Target has been involved in the last ten 10 years.
  • Description of any past or on-going remediation efforts relating to environmental matters.
  • Copies of any documents concerning past or present enforcement actions against any premises owned.
  • Summary of all dedicated reserves for management of environmental liabilities and policies and procedures.
  • All information and correspondence regarding generation, treatment, storage and disposition of hazardous substances.
  • Copies of any material correspondence with any environmental regulatory agencies.
  • Summary of any material financial losses suffered as a result of environmental matters and/or acts of God. 
  • Summary of the results of all environmental audits, including the resolution of any findings.
  • Copies of all environmental studies, assessments and surveys relating to the Target in respect of land and premises owned. 
  • Please describe any off-site liability risks arising from arrangements for the treatment or disposal of materials, liquids, or gases used by the Target. 
  • Copies of all permits and other governmental approvals and related applications relating to environmental matters. 
  • Description of any currently existing aboveground or underground storage tanks or tanks previously located at any premises. 
  • Description of all wastes generated or handled at the Target’s premises, the quantities of each, and how they are handled, stored, and disposed.  
  • Summary of all investigations, citations, or notices of violation related to employee health and/or safety.
  • Summary of all current or past litigation brought against the Target by any current or former employee.
  • Summary of the results of all health and safety audits.
  • Summary of any accidents within the last 5 years.
  • Summary of all workers' compensation claims, including any liabilities associated therewith and the outcome thereof.
  • Copies of all material safety data sheets for materials produced or used at any premises owned or operated by the Target.  
  • Summary of all emergency response policies and procedures, including copies of all SOPs and other documentation related thereto.

FAQ

What Is Due Diligence?

Due diligence is a critical aspect of any deal that begins very early in the process and can continue right up until closing. During due diligence, the potential buyer asks questions and requests documentation from the seller that helps the buyer understand the target company and its business. These requests are usually general to start and become more specific as the buyer develops a greater understanding of the target. Buyers use the information provided by the seller to evaluate the opportunities and risks associated with the potential transaction. It is important for sellers to stay organized throughout the process. Buyers often submit thorough, detailed request lists that require input from numerous members of the seller’s deal team.

What is a due diligence checklist?

As the name implies, a due diligence request list is a list of questions and requests for information and documentation that a buyer submits to a seller in order to learn about the target company, its business and its operations. The initial diligence request list tends to be broad and typically includes an extensive list of questions covering a wide range of subjects. This allows the buyer to gain a broad understanding of the target company and identify key issues that can be investigated and considered more closely. Because every deal is different, due diligence request lists have to be tailored to meet the needs of the buyer and address the unique circumstances of your transaction.
However, there is a variety of fundamental requests that are relevant in most deals. These are the types of requests that our templates are designed to address.

What Questions Does the Master Due Diligence Questionnaire Include?

As the name implies, a due diligence request list is a list of questions and requests for information and documentation that a buyer submits to a seller in order to learn about the target company, its business and its operations. The initial diligence request list tends to be broad and typically includes an extensive list of questions covering a wide range of subjects. This allows the buyer to gain a broad understanding of the target company and identify key issues that can be investigated and considered more closely. Because every deal is different, due diligence request lists have to be tailored to meet the needs of the buyer and address the unique circumstances of your transaction.
However, there is a variety of fundamental requests that are relevant in most deals. These are the types of requests that our templates are designed to address.

Key considerations when using our m&a due diligence template

Our templates are drafted to provide an inclusive and wide-ranging list of initial due diligence requests. However, the templates, as well as the information contained therein, are not legal advice. They are not complete, and they are not specific to your transaction. The templates are designed to elicit general information from the seller that will provide the buyer with a broad overview of the target and it’s business and operations. You should review any template before using it, and it may need to be modified to ensure that it is suitable and relevant to your circumstances. Information provided by the seller will likely trigger additional questions that focus on specific aspects of the target’s business and issues identified during the due diligence process.

Are the requests in the template comprehensive?

No. Our Due Diligence Checklist is drafted to include typical requests that are relevant in most transactions. However, every deal and every target company is unique. Before utilizing any template, it is important that you review it with the help of your legal and other professional advisors to ensure that the requests are complete and tailored to the specific circumstances of your deal.

How to use the template with Dealroom

  • Start 14-day Free Trial of DealRoom and sign-up
  • Select a Master Due Diligence Template while creating a new room
  • Start assigning, adding to, and completing due diligence requests with needed documents by uploading them into the built-in virtual data room. The Requests tab is automatically populated with the requests from the due diligence template.

Can I change requests in this checklist or add new?

Every M&A process is different. Downloaders are urged to make these checklists their own by changing the providing information to better fit their needs.

Does this questionnaire provide all the necessary integration information?

This checklist was created by and for M&A professionals. It includes a comprehensive starting point for the integration process. However, every deal is different and may require additional requirements and tasks.

How to use this template with DealRoom?

  • Start 14-day Free Trial of DealRoom and sign-up
  • Select an Integration Template while creating a new workspace
  • Start planning, assigning, adding to, and completing integration tasks. The Requests tab is automatically populated with the tasks from the integration template.

Key considerations when using our m&a due diligence template

Our templates are drafted to provide an inclusive and wide-ranging list of initial due diligence requests. However, the templates, as well as the information contained therein, are not legal advice. They are not complete, and they are not specific to your transaction. The templates are designed to elicit general information from the seller that will provide the buyer with a broad overview of the target and it’s business and operations. You should review any template before using it, and it may need to be modified to ensure that it is suitable and relevant to your circumstances. Information provided by the seller will likely trigger additional questions that focus on specific aspects of the target’s business and issues identified during the due diligence process.

Are the requests in the template comprehensive?

No. Our Due Diligence Checklist is drafted to include typical requests that are relevant in most transactions. However, every deal and every target company is unique. Before utilizing any template, it is important that you review it with the help of your legal and other professional advisors to ensure that the requests are complete and tailored to the specific circumstances of your deal.

How to use the template with Dealroom

  • Start 14-day Free Trial of DealRoom and sign-up
  • Select a Master Due Diligence Template while creating a new room
  • Start assigning, adding to, and completing due diligence requests with needed documents by uploading them into the built-in virtual data room. The Requests tab is automatically populated with the requests from the due diligence template.

Healthcare Due Diligence Playbook

Our healthcare playbook emphasizes those areas of due diligence where issues most often arise for healthcare targets. You can customize it to meet the specific circumstances and needs of your deal.

Healthcare due diligence can be challenging

In order to execute M&A transactions in healthcare industry, organizations need to understand the right questions to ask, all while preventing hundreds of diligence-related emails, back-and-forth Excel sheets, and information silos.

This is why we built DealRoom. Our due diligence solution will transform your diligence process into one efficient workflow.

Start trial with this playbook

Prepare for your due diligence

DealRoom’s healthcare due diligence template is designed to help teams have an efficient due diligence process from the beginning. By providing your team with a pre-made professional diligence checklist, you can get a jump start on fulfilling diligence requests.

The template can act as a guide for common diligence requests categories such as legal, financial, HR, IT, commercial and more. And when you use a diligence tracker inside DealRoom, everything will be in one centralized space.

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  • Infrastructure (equipment, technology, capabilities)
  • Location proximity to ancillary services and transportation (bus-line)
  • Median household income, age, workforce opportunities
  • Payer mix, CMI, and discharge data by county and diagnosis group
  • Current methods for scheduling, documentation, coding and billing
  • Adult and pediatric inpatient and ED incidence rates
  • Transfer/referral frequency and receiving facilities
  • Competing services Potential for growth Strategic fit
  • Quantity and training of additional support staff (RNs, Mid-levels and other providers)
  • Potential Key Performance Indicators (KPIs) expectations for number of visits, return on investment, etc.
  • Insurance Claims and Risk Management • OSHA and workers compensation
  • Environmental Compliance (Solid and hazardous waste, infectious medical waste, underground storage tanks, radioactive materials)
  • Medical Staff and Physician Matters
  • Admissions (inpatients)
  • Number of inpatient days and growth of inpatient days, Length of stay
  • Daily censusOccupancy rates
  • Outpatient visits and growth in visits
  • Adjusted patient days
  • Case mix percent of volume (inpatient and outpatient)
  • Commercial, self pay, Medicare, Medicaid
  • Medicare outpatient cost to charge
  • Non-Financial Due DiligenceICD 9 conversion to ICD 10
  • Compliance & risk management programs
  • Revenue CycleCoding
  • Purchasing and supply management
  • Information technologyPatient experience
  • Competition in primary market area
  • Population demographics
  • Types of services offered (Primary vs. specialized)
  • Types of physicians
  • Employees or contracted through professional services agreements (PSAs)
  • Ease of recruiting new physicians
  • Pricing power in hands of hospital or commercial payors
  • Location
  • Age and curb appeal of hospital campus
  • Physician contractingManaged care contracting
  • Organizational chart showing the corporate structure of the Target and all subsidiaries and affiliates.
  • Copies of all joint venture agreements, partnership agreements or agreements involving the sharing of profits or technology
  • Applicable governing documents for the Target and all subsidiaries and affiliates
  • List of all jurisdictions in which the Target and its subsidiaries and affiliates are licensed to do business.
  • Minutes and/or resolutions for all meetings of the board and shareholders/members, as applicable.
  • Ccopies of any contracts relating to any material acquisitions and/or divestitures of equity and/or assets
  • Summary of all related party transactions entered into in the past 3 years, including the key terms thereof and review/approval procedures applicable thereto.
  • Professional biography for each member of the management team and any other key employees identified by Buyer.
  • Professional biography for each member of the board.
  • Documentation evidencing each issuance of equity for the Target and each subisidiary and/or affiliate.
  • Summary of all oustanding options, warrants, covertible notes, and any other right entitling the holder to obtain equity in the Target or any subisidiary or affiliate.
  • Copy of all outstanding debt instruments.
  • Summary of all material litigation.
  • Summary of all permits, licenses, and other authorizations that are required for the Target to conduct its business.
  • Copies of all agreements or instruments that place restrictions or encumbrances on assets.
  • Copies of all material contracts that are terminable upon a change of control or other corporate transaction.
  • Copies of all contracts that restrict the right to conduct its business.
  • Copies of all contracts under which the Target has any continuing obligations.
  • Copies of all indemnification agreements between the Target and any officers, directors or agents thereof.
  • Summary of the Target's compliance program and copies of all policies, procedures.
  • Summary of all material regulations applicable to the Target and/or its business.
  • Please provide copies of any material correspondence with any regulatory agencies or authorities.
  • Summary of all product recalls conducted by the Target in the last 5 years.
  • Summary of all material warranty claims brought within the last 5 years.
  • List of the top 25 customers for each of the past 3 years, including revenue.
  • List of all material customers that have ceased doing business with the Target in the past 12 months.
  • List of all material sales channel partners for each of the past 3 years.
  • Breakdown of sales and gross profits by: Product Type; Geography; Sales Channel.
  • Copies of all material customer contracts.
  • Copies of all contracts with material sales channel partners
  • Copies of all contracts with government customers.
  • Copies of all material contracts that have remaining terms longer than one year.
  • Copies of policies and procedures related to credits, returns, warranty claims, etc.
  • Copies of policies and procedures related to pricing.
  • Copies of any strategic plans.
  • Copies of any marketing/advertising plans.
  • Summary of anticipated new products and/or product improvements.
  • Copies of all brochures, presentations, sales sheet, and other advertising and/or marketing materials.
  • Product descriptions for all material products and product lines.
  • Summary of all ongoing R&D projects, including an estimated timeline for completion thereof.
  • Summary of all marketing risks and opportunities.
  • List of the top 15 suppliers for each of the past 3 years, including spend.
  • Copies of all material supplier contracts.
  • Copies of all material subcontractor contracts.
  • Summary of the policies and procedures utilized when evaluating and onboarding any new supplier or subcontractor.
  • Copies of audited financial statements and each subsidiary and affiliates.
  • Copies of unaudited financial statements.
  • Detailed description of any off-balance sheet/statement of financial position items, liabilities or obligations of any nature.
  • Schedule and description of any contingent liabilities not disclosed or referred to in the financial statements. 
  • Detailed schedule of the components of all prepaid expenses and deposits.
  • Copies of any letters issued by the Target’s auditors during the last 5 years regarding the Target’s accounting controls, method of accounting and other procedures, including all Management Representation Letters.
  • Summary of all material changes to accounting policies adopted.
  • Copies of all budgets and operating plans.
  • Copies of all financial projections.
  • Summary of any cash management controls and practices.
  • Summary of the Target's investment policies.
  • Summary of the Target's hedging policies.
  • Report reflecting all aged accounts receivable trial balances.
  • Summary of the Target’s inventory costing system and other procedures and policies related to inventory.
  • Schedule and detailed description of any reserves/contingency funds established for specific risk situations. 
  • Copies of recent bank reconciliations and bank statements for all material bank accounts. 
  • Summary of all capital expenditures planned in the next 12 months.
  • Current fixed asset register and/or copy of latest physical inventory of all equipment and other assets. 
  • Summary of all current insurance coverages and copies of all policy documents related thereto.
  • Summary of all claims made against any insurance policy within the last 5 years.
  • Copies of all employment agreements and indicate those affected by the transaction.
  • Copies of all consulting agreements.
  • To the extent not already provided, copies of all agreements relating to any compensation arrangements between the Target and any third party.
  • Copies of all collective bargaining agreements.
  • Copies of all confidentiality, non-competition, nondisclosure, non-solicitation, intellectual property, or similar agreements. 
  • Copies of any severance agreements under which the Target has or may have outstanding liabilities whether as a result of the proposed transaction or otherwise.
  • Summary of any current recruitment initiatives.
  • Summary of all benefits.
  • Copies of plan documents for all benefit plans.
  • Copy of the Target's compensation policy.
  • Details of bonus or other profit-related schemes and details of beneficiaries/participants. 
  • Summary of all incentive stock option plans.
  • Summary of all outstanding stock option awards and copies of any award documents related thereto.
  • List and detailed summary of all pension pension plans.
  • Summary of all litigation against the Target brought by any current or former employee.
  • Description of any court judgement or current employment tribunal award in respect of any employee dispute.
  • Headcount by function and location.
  • Schedule of any employees suspended – including reasons for suspension and salary implications. 
  • Schedule of employees dismissed in the last 12 months.
  • Schedule of all employees absent from work due to disability, long-term illness, or otherwise.
  • Schedule of employees covered by any disability legislation applicable in the jurisdiction in which the Target operates. 
  • Copies of all employee handbooks and other employee policies.
  • Detailed summary of the Target's hiring practices and policies.
  • Summary of any changes that have been agreed within the past 12 months.
  • Detailed schedule of any loans granted to employees.
  • Summary of all patents and registered trademarks held by the Target. 
  • schedule of all websites and domains owned or run by the Target and any terms and conditions related thereto.
  • Copies of all agreements under which the Target is granted the right to use IP owned by a third party.
  • Copies of all agreements under which a third party is granted the right to use IP owned by the Target.
  • Summary of any IP that is not solely owned by the Target (e.g., joint ownership, non-exclusive license, etc.), including any contracts or other documentation related thereto.    
  • Summary of any past or current instances where any third party actually or allegedly infringed on the Target's IP or where the Target actually or allegedly infringed on a third party's IP.
  • Detailed summary of any restrictions to which IP assets of the Target are subject.
  • Summary of all IP litigation in which the Target is or has been involved, including the current status or outcome thereof (e.g., court orders, settlements, etc.).
  • Summary of the Target's process for generating/developing, recognizing, capturing, and protecting (for instance, via patents) IP assets.
  • Details of any current and planned IT initiatives/key projects.
  • Summary of all key IT resources. 
  • Summary of the Target's policies and practices regarding the purchase and maintenance of software.
  • Summary of all material software utilized by the Target.
  • Summary of the Target's policies and practices regarding the purchase and maintenance of IT hardware.
  • Summary of all material hardware utilized by the Target, including the physical location thereof.
  • Diagram of the Target's technical architecture including servers, storage devices, operating systems and databases.  
  • Description of the networking systems utilized by the Target.
  • Summary of any specific hardware configurations utilized.
  • Summary of any vendor support or other support services to which the Target is entitled.
  • Summary of annual costs associated with maintenance of IT hardware for the past 3 years.
  • Copies of all material contracts related to software and/or IT services obtained by the Company.
  • Summary of services provided by all external IT contractors/consultants. 
  • Describe the capacity for growth in the Target's current IT environment.
  • Summary of how technology acquired by the Target.
  • Summary of the Target's support/help desk effectiveness and approach.
  • Summary of the role of  technology/IT in the Target's strategic plan.
  • Describe the level of automation made possible via the Target's IT systems.
  • Description of any web-based or internet facing applications hosted.
  • Description of the key security protocols adopted by the Target. 
  • Description of the Target's policies and procedures related to backups and/or disaster recovery.  
  • Description of the Target's data privacy policies and procedures.
  • Summary of all personal and/or sensitive information held and/or processed by the Target.
  • Results of any stress test analysis undertaken by the Target.
  • Summary of all monitoring measures/tests conducted.
  • Summary of all environmental investigations, citations, or notices of violation received from any environmental regulatory agency.
  • Summary of all litigation in which the Target has been involved in the last ten 10 years.
  • Description of any past or on-going remediation efforts relating to environmental matters.
  • Copies of any documents concerning past or present enforcement actions against any premises owned.
  • Summary of all dedicated reserves for management of environmental liabilities and policies and procedures.
  • All information and correspondence regarding generation, treatment, storage and disposition of hazardous substances.
  • Copies of any material correspondence with any environmental regulatory agencies.
  • Summary of any material financial losses suffered as a result of environmental matters and/or acts of God. 
  • Summary of the results of all environmental audits, including the resolution of any findings.
  • Copies of all environmental studies, assessments and surveys relating to the Target in respect of land and premises owned. 
  • Please describe any off-site liability risks arising from arrangements for the treatment or disposal of materials, liquids, or gases used by the Target. 
  • Copies of all permits and other governmental approvals and related applications relating to environmental matters. 
  • Description of any currently existing aboveground or underground storage tanks or tanks previously located at any premises. 
  • Description of all wastes generated or handled at the Target’s premises, the quantities of each, and how they are handled, stored, and disposed.  
  • Summary of all investigations, citations, or notices of violation related to employee health and/or safety.
  • Summary of all current or past litigation brought against the Target by any current or former employee.
  • Summary of the results of all health and safety audits.
  • Summary of any accidents within the last 5 years.
  • Summary of all workers' compensation claims, including any liabilities associated therewith and the outcome thereof.
  • Copies of all material safety data sheets for materials produced or used at any premises owned or operated by the Target.  
  • Summary of all emergency response policies and procedures, including copies of all SOPs and other documentation related thereto.

Industry

  • Infrastructure (equipment, technology, capabilities)
  • Location proximity to ancillary services and transportation (bus-line)
  • Median household income, age, workforce opportunities
  • Payer mix, CMI, and discharge data by county and diagnosis group
  • Current methods for scheduling, documentation, coding and billing
  • Adult and pediatric inpatient and ED incidence rates
  • Transfer/referral frequency and receiving facilities
  • Competing services Potential for growth Strategic fit
  • Quantity and training of additional support staff (RNs, Mid-levels and other providers)
  • Potential Key Performance Indicators (KPIs) expectations for number of visits, return on investment, etc.
  • Insurance Claims and Risk Management • OSHA and workers compensation
  • Environmental Compliance (Solid and hazardous waste, infectious medical waste, underground storage tanks, radioactive materials)
  • Medical Staff and Physician Matters
  • Admissions (inpatients)
  • Number of inpatient days and growth of inpatient days, Length of stay
  • Daily censusOccupancy rates
  • Outpatient visits and growth in visits
  • Adjusted patient days
  • Case mix percent of volume (inpatient and outpatient)
  • Commercial, self pay, Medicare, Medicaid
  • Medicare outpatient cost to charge
  • Non-Financial Due DiligenceICD 9 conversion to ICD 10
  • Compliance & risk management programs
  • Revenue CycleCoding
  • Purchasing and supply management
  • Information technologyPatient experience
  • Competition in primary market area
  • Population demographics
  • Types of services offered (Primary vs. specialized)
  • Types of physicians
  • Employees or contracted through professional services agreements (PSAs)
  • Ease of recruiting new physicians
  • Pricing power in hands of hospital or commercial payors
  • Location
  • Age and curb appeal of hospital campus
  • Physician contractingManaged care contracting

Legal

  • Organizational chart showing the corporate structure of the Target and all subsidiaries and affiliates.
  • Copies of all joint venture agreements, partnership agreements or agreements involving the sharing of profits or technology
  • Applicable governing documents for the Target and all subsidiaries and affiliates
  • List of all jurisdictions in which the Target and its subsidiaries and affiliates are licensed to do business.
  • Minutes and/or resolutions for all meetings of the board and shareholders/members, as applicable.
  • Ccopies of any contracts relating to any material acquisitions and/or divestitures of equity and/or assets
  • Summary of all related party transactions entered into in the past 3 years, including the key terms thereof and review/approval procedures applicable thereto.
  • Professional biography for each member of the management team and any other key employees identified by Buyer.
  • Professional biography for each member of the board.
  • Documentation evidencing each issuance of equity for the Target and each subisidiary and/or affiliate.
  • Summary of all oustanding options, warrants, covertible notes, and any other right entitling the holder to obtain equity in the Target or any subisidiary or affiliate.
  • Copy of all outstanding debt instruments.
  • Summary of all material litigation.
  • Summary of all permits, licenses, and other authorizations that are required for the Target to conduct its business.
  • Copies of all agreements or instruments that place restrictions or encumbrances on assets.
  • Copies of all material contracts that are terminable upon a change of control or other corporate transaction.
  • Copies of all contracts that restrict the right to conduct its business.
  • Copies of all contracts under which the Target has any continuing obligations.
  • Copies of all indemnification agreements between the Target and any officers, directors or agents thereof.
  • Summary of the Target's compliance program and copies of all policies, procedures.
  • Summary of all material regulations applicable to the Target and/or its business.
  • Please provide copies of any material correspondence with any regulatory agencies or authorities.
  • Summary of all product recalls conducted by the Target in the last 5 years.
  • Summary of all material warranty claims brought within the last 5 years.

Commercial

  • List of the top 25 customers for each of the past 3 years, including revenue.
  • List of all material customers that have ceased doing business with the Target in the past 12 months.
  • List of all material sales channel partners for each of the past 3 years.
  • Breakdown of sales and gross profits by: Product Type; Geography; Sales Channel.
  • Copies of all material customer contracts.
  • Copies of all contracts with material sales channel partners
  • Copies of all contracts with government customers.
  • Copies of all material contracts that have remaining terms longer than one year.
  • Copies of policies and procedures related to credits, returns, warranty claims, etc.
  • Copies of policies and procedures related to pricing.
  • Copies of any strategic plans.
  • Copies of any marketing/advertising plans.
  • Summary of anticipated new products and/or product improvements.
  • Copies of all brochures, presentations, sales sheet, and other advertising and/or marketing materials.
  • Product descriptions for all material products and product lines.
  • Summary of all ongoing R&D projects, including an estimated timeline for completion thereof.
  • Summary of all marketing risks and opportunities.
  • List of the top 15 suppliers for each of the past 3 years, including spend.
  • Copies of all material supplier contracts.
  • Copies of all material subcontractor contracts.
  • Summary of the policies and procedures utilized when evaluating and onboarding any new supplier or subcontractor.

Financial

  • Copies of audited financial statements and each subsidiary and affiliates.
  • Copies of unaudited financial statements.
  • Detailed description of any off-balance sheet/statement of financial position items, liabilities or obligations of any nature.
  • Schedule and description of any contingent liabilities not disclosed or referred to in the financial statements. 
  • Detailed schedule of the components of all prepaid expenses and deposits.
  • Copies of any letters issued by the Target’s auditors during the last 5 years regarding the Target’s accounting controls, method of accounting and other procedures, including all Management Representation Letters.
  • Summary of all material changes to accounting policies adopted.
  • Copies of all budgets and operating plans.
  • Copies of all financial projections.
  • Summary of any cash management controls and practices.
  • Summary of the Target's investment policies.
  • Summary of the Target's hedging policies.
  • Report reflecting all aged accounts receivable trial balances.
  • Summary of the Target’s inventory costing system and other procedures and policies related to inventory.
  • Schedule and detailed description of any reserves/contingency funds established for specific risk situations. 
  • Copies of recent bank reconciliations and bank statements for all material bank accounts. 
  • Summary of all capital expenditures planned in the next 12 months.
  • Current fixed asset register and/or copy of latest physical inventory of all equipment and other assets. 
  • Summary of all current insurance coverages and copies of all policy documents related thereto.
  • Summary of all claims made against any insurance policy within the last 5 years.

Human Resources

  • Copies of all employment agreements and indicate those affected by the transaction.
  • Copies of all consulting agreements.
  • To the extent not already provided, copies of all agreements relating to any compensation arrangements between the Target and any third party.
  • Copies of all collective bargaining agreements.
  • Copies of all confidentiality, non-competition, nondisclosure, non-solicitation, intellectual property, or similar agreements. 
  • Copies of any severance agreements under which the Target has or may have outstanding liabilities whether as a result of the proposed transaction or otherwise.
  • Summary of any current recruitment initiatives.
  • Summary of all benefits.
  • Copies of plan documents for all benefit plans.
  • Copy of the Target's compensation policy.
  • Details of bonus or other profit-related schemes and details of beneficiaries/participants. 
  • Summary of all incentive stock option plans.
  • Summary of all outstanding stock option awards and copies of any award documents related thereto.
  • List and detailed summary of all pension pension plans.
  • Summary of all litigation against the Target brought by any current or former employee.
  • Description of any court judgement or current employment tribunal award in respect of any employee dispute.
  • Headcount by function and location.
  • Schedule of any employees suspended – including reasons for suspension and salary implications. 
  • Schedule of employees dismissed in the last 12 months.
  • Schedule of all employees absent from work due to disability, long-term illness, or otherwise.
  • Schedule of employees covered by any disability legislation applicable in the jurisdiction in which the Target operates. 
  • Copies of all employee handbooks and other employee policies.
  • Detailed summary of the Target's hiring practices and policies.
  • Summary of any changes that have been agreed within the past 12 months.
  • Detailed schedule of any loans granted to employees.

Intellectual Property

  • Summary of all patents and registered trademarks held by the Target. 
  • schedule of all websites and domains owned or run by the Target and any terms and conditions related thereto.
  • Copies of all agreements under which the Target is granted the right to use IP owned by a third party.
  • Copies of all agreements under which a third party is granted the right to use IP owned by the Target.
  • Summary of any IP that is not solely owned by the Target (e.g., joint ownership, non-exclusive license, etc.), including any contracts or other documentation related thereto.    
  • Summary of any past or current instances where any third party actually or allegedly infringed on the Target's IP or where the Target actually or allegedly infringed on a third party's IP.
  • Detailed summary of any restrictions to which IP assets of the Target are subject.
  • Summary of all IP litigation in which the Target is or has been involved, including the current status or outcome thereof (e.g., court orders, settlements, etc.).
  • Summary of the Target's process for generating/developing, recognizing, capturing, and protecting (for instance, via patents) IP assets.

Information Technology

  • Details of any current and planned IT initiatives/key projects.
  • Summary of all key IT resources. 
  • Summary of the Target's policies and practices regarding the purchase and maintenance of software.
  • Summary of all material software utilized by the Target.
  • Summary of the Target's policies and practices regarding the purchase and maintenance of IT hardware.
  • Summary of all material hardware utilized by the Target, including the physical location thereof.
  • Diagram of the Target's technical architecture including servers, storage devices, operating systems and databases.  
  • Description of the networking systems utilized by the Target.
  • Summary of any specific hardware configurations utilized.
  • Summary of any vendor support or other support services to which the Target is entitled.
  • Summary of annual costs associated with maintenance of IT hardware for the past 3 years.
  • Copies of all material contracts related to software and/or IT services obtained by the Company.
  • Summary of services provided by all external IT contractors/consultants. 
  • Describe the capacity for growth in the Target's current IT environment.
  • Summary of how technology acquired by the Target.
  • Summary of the Target's support/help desk effectiveness and approach.
  • Summary of the role of  technology/IT in the Target's strategic plan.
  • Describe the level of automation made possible via the Target's IT systems.
  • Description of any web-based or internet facing applications hosted.
  • Description of the key security protocols adopted by the Target. 
  • Description of the Target's policies and procedures related to backups and/or disaster recovery.  
  • Description of the Target's data privacy policies and procedures.
  • Summary of all personal and/or sensitive information held and/or processed by the Target.
  • Results of any stress test analysis undertaken by the Target.
  • Summary of all monitoring measures/tests conducted.

Environmental, Health and Safety (EH&S)

  • Summary of all environmental investigations, citations, or notices of violation received from any environmental regulatory agency.
  • Summary of all litigation in which the Target has been involved in the last ten 10 years.
  • Description of any past or on-going remediation efforts relating to environmental matters.
  • Copies of any documents concerning past or present enforcement actions against any premises owned.
  • Summary of all dedicated reserves for management of environmental liabilities and policies and procedures.
  • All information and correspondence regarding generation, treatment, storage and disposition of hazardous substances.
  • Copies of any material correspondence with any environmental regulatory agencies.
  • Summary of any material financial losses suffered as a result of environmental matters and/or acts of God. 
  • Summary of the results of all environmental audits, including the resolution of any findings.
  • Copies of all environmental studies, assessments and surveys relating to the Target in respect of land and premises owned. 
  • Please describe any off-site liability risks arising from arrangements for the treatment or disposal of materials, liquids, or gases used by the Target. 
  • Copies of all permits and other governmental approvals and related applications relating to environmental matters. 
  • Description of any currently existing aboveground or underground storage tanks or tanks previously located at any premises. 
  • Description of all wastes generated or handled at the Target’s premises, the quantities of each, and how they are handled, stored, and disposed.  
  • Summary of all investigations, citations, or notices of violation related to employee health and/or safety.
  • Summary of all current or past litigation brought against the Target by any current or former employee.
  • Summary of the results of all health and safety audits.
  • Summary of any accidents within the last 5 years.
  • Summary of all workers' compensation claims, including any liabilities associated therewith and the outcome thereof.
  • Copies of all material safety data sheets for materials produced or used at any premises owned or operated by the Target.  
  • Summary of all emergency response policies and procedures, including copies of all SOPs and other documentation related thereto.

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