Situation: Brightmoor’s shareholders had developed a stable, profitable hospice provider in a highly-regulated environment. However, industry-wide changes to Medicare reimbursement rates as a result of the Affordable Care Act negatively impacted Brightmoor’s financial performance, and the four equal shareholders often had diverging individual expectations for the business. Brightmoor had reached a crossroads in their history. On the one hand, the owners recognized that Brightmoor could benefit from new ownership who had more time to focus on the existing growth opportunities and cost savings. On the other hand, the owners believed a buyout of an individual shareholder and a re-investment in the business by the remaining shareholders would be a superior outcome.
Advisory Role: Bravaldo Capital Advisors (BCA) was engaged by Brightmoor as its exclusive advisor to explore strategic alternatives for the business. BCA ran a dual process to simultaneously explore the possibility of a strategic sale and a shareholder buy-out, running a marketing campaign to target select hospice buyers while also developing plans for a recapitalization.
Result: Bravaldo Capital Advisors successfully obtained multiple offers for the business, but BCA ultimately advised the shareholders that the optimal choice to achieve their goals was a shareholder buy-out and recapitalization.
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