2018 SUMMER MEETING · Wake Forest Baptist Medical Center History •HPI • 8 moold female with no...

This continuing medical education activity is jointly provided by the North Carolina Dermatology Association and Southern Regional Area Health Education Center.

July 13-15, 2018 | Omni Grove Park Inn Resort | Asheville, NC

North Carolina Dermatology Association

2018 SUMMER MEETING SUNDAY PRESENTATIONS

Nutritional Deficiency in a breast feeding infantMichael Farhangian, MDDermatology Resident, PGY-3Wake Forest University School of MedicineDepartment of Dermatology

Wake Forest Baptist Medical Center

History

• HPI• 8 mo old female with no significant PMH, evaluated for

cutaneous eruption x 2 mos. • On neck folds, popliteal fossae• The patient was diagnosed by referring physicians as atopic

dermatitis and treated with hydrocortisone 1% cream; however the eruption became progressively worse despite treatment.

• Appears asymptomatic to parents• Loose stools and poor weight gain noted over past few months

in infant• Mother currently breast feeding as patient had aversion to solid

foods• Mother noted to frequently skip meals

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History

• PMH• None, full term birth (39.5 weeks), C-section

• Past Surgical History• None

• Social History• Living at home with mother

• Allergies• NKDA

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Physical Exam

Vitals:Pulse: 130T: 97.8FRR: 36Height: 0.67 metersWeight 6.6 kgWeight=13th percentile, length 53rd percentile, weight for length 4.6 percentileZinc: 62mcg/dL, Alkaline Phosphatase 135IU/L, Vitamin B6 13.8ng/mL, Vitamin B12 116 pg/mL, Vitamin A 12 mcg/dL, Prealbumin 9.7 mg/dL, Free fatty acids 0.44 mmol/L

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Differential

• Acrodermatitis enteropathica• Atopic Dermatitis• Tinea Coporis• Vitamin A deficiency• Essential Fatty Acid Deficiency

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Essential Fatty Acid Deficiency (EFA)

• Based on clinical findings and lab tests, patient was diagnosed with Essential Fatty acid (EFA) deficiency

• If in infants, generally seen in prematurity or malabsorption• More specific laboratory tests:

• Decreased linolenic acid• Decreased arachidonic acid• Decreased 5,8,11-eicosatrienoic acid

Picture courtesy of Bolognia, Jean., L.Schaffer, Julie V., Cerroni, Lorenzo (Eds.) (2017) Dermatology /[Philadelphia] : Elsevier Saunders

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Essential Fatty Acid Deficiency

• Linoleic and linolenic acid are essential fatty acids that mammals cannot synthesize=precursors to longer chain fatty acids1

• Contained within fish and vegetable oils• Required for maintenance of cell membrane

function (and fluidity), modulation of epidermal proliferation and inflammation2

• Infants require a higher percentage of EFA in diet than adults – who need roughly 1-2% of their diet to be EFA, premature patients are at increased risk due to smaller fat stores3

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Essential Fatty Acid Deficiency

• Role in water barrier function2

• Lamellar bodies in stratum corneum require sphingolipids which are linoleate-rich

• Role in epidermal hyperproliferation• Required to form diacylglycerol in cell membranes

which plays a profound role in cell signaling and gene transcription

• Role in modulating inflammation• EFA’s are precursors to arachidonic

acidprostaglandins; at physiologic levels modulate inflammation

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Clinical Features of EFA Deficiency

• Xerosis• Scaly, erythematous intertriginous eruption• Traumatic purpura, poor wound healing• Brittle nails, alopecia• Hyper- and hypopigmentation of hair

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Treatment of EFA Deficiency

• Topical Sunflower seed and safflower oils (high in EFA), though systemic absorption is unpredictable

• Oral or intravenous supplementation of EFA’s6

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…Back to our patient

• Referred to pediatric gastroenterology and nutrition specialists

• Mother encouraged to eat more well balanced diet and continue breast feeding

• Rash resolved in 2 months with Mother’s improved diet and introduction of breast milk by patient’s Aunt

• Diet supplementation with formula and solid foods was recommended, though patient did not tolerate well initially

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Sources

1. Sadesai VM: The Essential Fatty Acids. Nutr Clin Pract 7(4):179-86, 1992

2. Ziboh VA, Miller CC, Cho Y Significance of lipoxygenase-derived monohydroxy fatty acids in cutaneous biology. Prostaglandins Other Lipid Mediat. 63(1-2):3-13. 2000

3. Duerksen D, McCurdy K: Essential fatty acid deficiency in a severely malnourished patient receiving parenteral nutrition. Dig Dis Sci 50:2386-2388, 2005

4. Goldsmith, Lowell A.,Fitzpatrick, Thomas B. (Eds.) (2012) Fitzpatrick's dermatology in general medicine /New York : McGraw-Hill Medical

5. Bolognia, Jean., L.Schaffer, Julie V., Cerroni, Lorenzo (Eds.) (2017) Dermatology /[Philadelphia] : Elsevier Saunders

6. Friedman Z et al: Correction of essential fatty acid deficiency in newborn infants by cutaneous application of sunflower-seed oil. Pediatrics 58:650-654, 1976

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Thank you!Questions?

Anogenital Verruciform Xanthoma associated with Lichen Sclerosus

Dana Baigrie DO PGY-4, Sampson Regional Medical CenterMark MacKay BS, Campbell University School of Osteopathic Medicine

Jonathan S. Crane DO FAAD FAOCDMuammar Arida MD, GPA/Aurora Diagnostics Greensboro, NC

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• I have no conflicts of interest or disclosures

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History of Present Illness 76 year old Caucasian female presents with perianal rash for 3 months. The rash is slightly pruritic. She denies any past or current treatments. She does report history of urinary incontinence, but no fecal incontinence. She admits to using baby wipes in area since onset of the rash. No history of melanoma or non-melanoma skin cancer. She also notes a skin tag in the area which is bothersome to her and requests removal. Review of symptoms otherwise unremarkable.

PMH: Breast cancer, COPD, diabetes, hyperlipidemia, hypothyroid PSH: Cholecystectomy, hysterectomy Social: No alcohol, former smokerMeds: Atorvastatin, lisinopril, miralax, synthroid, fish oil Allergies: NKDA

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Clinical differential diagnosis for the verrucous lesion?• Condyloma • Seborrheic keratosis • Squamous cell carcinoma• Verrucous carcinoma • Verruciform xanthoma

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Histopathology

CD168

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Clinical differential diagnosis for the white scaly area?• Lichen sclerosus• Contact dermatitis

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Histopathology

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Verruciform Xanthoma • Verruciform xanthoma: asymptomatic, planar or verrucous solitary

plaques ~ 1 - 2 cm• Most commonly occur on the oral mucosa

• Other sites: anogenital or periorificial sites • NO association with hyperlipidemia • Can occur in setting of lymphedema, epidermolysis bullosa, pemphigus,

discoid lupus erythematosus, graft vs host disease, and CHILD syndrome • Congential Hemidysplasia with Ichthyosiform erthroderma and Limb Defects• 2/9 sporadic lesions found to have missense mutation in exon 6 of NSDHL gene—

different from CHILD syndrome defect (exon 4 & 6)11

• Formation of the xanthoma cells possibly secondary to degeneration of or damage to cells in the overlying epithelium• IgG autoantibodies against ECM-1 are found in 80% of patients with LSA. Oxidative

stress may also play a role in the pathogenesis, based upon analysis of lesional skin that showed lipid peroxidation of epidermal basal cell layers, oxidative DNA damage and oxidative protein damage.

Verruciform Xanthoma & Lichen Sclerosus

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Verruciform Xanthoma & Lichen Sclerosus

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• Zegarelli et al proposed that damage to the epithelium could trigger the following cascade: (1) entrapment of epithelial cells in the papillary dermis, (2) subsequent degeneration of these cells and lipid formation, (3) engulfment of released lipids by macrophages, and (4) accumulation of foam cells between the rete ridges

• Interface may allow migration of epithelial cells to epidermis verruciform xanthoma may represent reaction pattern

• Treatment: complete surgical removal with appropriate management of LSA because of association with SCC in both VX and LSA

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Conclusions• VX in the anogenital region can be misleading clinically • May represent a reaction pattern induced by different

conditions/inflammatory disorders • If verruciform xanthoma diagnosis is suspected or considered, it is

important to look for associated vulvar or anogenital condition such as lichen planus or lichen sclerosus

• Treatment of VX includes surgical excision• Recurrence is rare • Imiquimod has also been used successfully

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References• Mehra S, Li L, Fan CY, et al: A novel somatic mutation of the 3β-hydroxysteroid dehydrogenase gene

in sporadic cutaneous verruciform xanthoma. Arch Dermatol 2005; 141: pp. 1263-1267• Oyama N, Chan I, Neill SM, et al.: Autoantibodies to extracellular matrix protein 1 in lichen

sclerosus. Lancet. 362:118-123 2003• Zegarelli DJ, Aegarelli-Schmidt EC, Zegarelli EV. Verruciform xanthoma: a clinical, light microscopic,

and electron microscopic study of two cases. Oral Surg Oral Med Oral Pathol. 1974;38(5):725-734• Fite C, Plantier FÇ, Dupin N, Avril MÇ, Moyal-Barracco M. Vulvar Verruciform XanthomaTen Cases

Associated With Lichen Sclerosus, Lichen Planus, or Other Conditions. ArchDermatol. 2011;147(9):1087–1092.

• Connolly SB, Lewis EJ, Lindholm JS, et al.: Management of cutaneous verruciform xanthoma. J Am Acad Dermatol. 42:343-347 2000.

• Mohsin SK, Lee MW, Amin MB, et al.: Cutaneous verruciform xanthoma: A report of five cases investigating the etiology and nature of xanthomatous cells. Am J Surg Pathol. 22:479-487 1998

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Special thanks to Dr. Muammar Arida at Aurora Diagnostics, Greensboro for his help with microscopic examination and images.

THANK YOU

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a case of pediatric pemphigus herpetiformisSam Wu MDUNC Dermatology and Skin Cancer Center7.15.20182018 NC Dermatology Association Summer Meeting

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outlinePresentation of case

Discussion of literature

Treatment

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disclosuresNone

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the rashErythematous, annular and polycyclic, pruritic, scaly plaques since 2 years of age with prominent involvement of the head and neckPrevious treatments:Topical steroidsTopical antifungalsTopical calcineurin inhibitorsOral antibioticsMethotrexateAcitretin

Previous biopsy:Psoriasiform dermatitis—acanthosis, spongiosis, mitoses, hypogranulosis, bacterial colonies, neutrophilic microabscesses.

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more treatments Topical steroids

Phototherapy

Oral terbinafine

Oral antibiotics

Etanercept

Adalimumab

Methotrexate

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further workupDIF: IgGH&E

IIF: positive to ICS at 1:640ELISA: positive for desmoglein 1, negative for desmoglein 3

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pemphigus herpetiformisRare manifestation of pemphigus foliaceous > pemphigus vulgaris

Erythematous, annular, pruritic plaques with vesicles/bullaeTypically spares mucosa

Neutrophilic and/or eosinophilic spongiosis with microabscesses, less acantholysis(especially early on)

PF‐like pattern on DIF

Dsg 1 > Dsg 3 on ELISA

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treatment of pemphigus herpetiformisSystemic corticosteroids

Dapsone

Others:AzathioprineCyclophosphamideRituximabMethotrexateMycophenolate mofetil

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responsePrednisone 1 mg/kg

Rituximab 750 mg/m2

2 doses, 2 weeks apart

Oral antibiotics continued

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summaryPemphigus herpetiformis is a rare manifestation of pemphigus

Clinical and histopathological features overlap with that of dermatitis herpetiformis

Immunological findings most often resemble those of pemphigus foliaceous, but can vary

Pemphigus herpetiformis is rare in children, but should be considered in the differential of persistent, annular and polycyclic lesions

Treatment options for pemphigus herpetiformis include prednisone, dapsone, rituximab, and other immunosuppressants

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referencesMetry DW, Hebert AA, Jordan RE. Nonendemic pemphigus foliaceus in children. J Am AcadDermatol. 2002;46:419‐22.Peterman CM, Vadeboncoeur S, Schmidt BA, Gellis SE. Pediatric pemphigus herpetiformis: case report and review of the literature. Pediatr Dermatol. 2017 May;32(3):342‐346.Santi CG, Maruta CW, Aoki V, Sotto MN, Rivitti EA, Diaz LA. Pemphigus herpetiformis is a rare clinical expression of nonendemic pemphigus foliaceus, fogo selvagem, and pemphigus vulgaris. J Am Acad Dermatol. 1996 Jan;34(1):40‐6.Duarte IB, Bastazini Jr I, Barreto JA, Carvalho CV, Nunes AJ. Pemphigus herpetiformis in childhood. Pediatr Dermatol. 2010 Sep 1;27(5):488‐91.Hocar O, Ait Sab I, Akhdari N, Hakkou M, Amal S. A case of pemphigus herpetiformis in a 12‐year‐old male. ISRN Pediatrics. 2011 Apr 7;2011.Kasperkiewicz M, Kowalewski C, Jablońska S. Pemphigus herpetiformis: from first description until now. J Am Acad Dermatol. 2014 Apr;70(4):780‐7.

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thank you!Dr. Megan Evans

Dr. Donna Culton

Dr. Katharine Kenyon

Dr. Luis Diaz

Dr. Dean Morrell

Dr. Paul Googe

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Urticarial Vasculitis: A Clue to Something Deeper

Mary Ramirez, MD

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Patient Presentation

• 20 year old male • PMH

– Sensorineural hearing loss in right ear– Hemorrhoids

• Medications– None

• Allergies – Rabbit dander

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• ED Consult– Chief complaint: Bloody diarrhea that

started 10 days prior followed by a burning, painful rash + joint pains + joint swelling

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• History of present illness – PCP visit 5 days later

• Diarrhea: Imodium • Rash: Triamcinolone 0.5% cream • Labs

– BMP normal – CBC

» WBC 10.3 (H)» Hemoglobin 9.1 (L)

– ANA 1:40 – ASO (-)– CRP normal

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History of present illness

• Dermatologist visit 2 days later– Diarrhea better, rash worse– Stop Imodium – Start Benadryl and Allegra + triamcinolone

0.5% cream

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• Patient presented to ED– Too painful to walk due to swollen, tender feet– Rash: Arms, legs, hands, feet

• Burning, painful, and slightly pruritic• No recent tick bites• No travel outside of North Carolina• No history of HSV • No history of mononucleosis • No sick contacts • No urethral discharge, dysuria, hematuria, polyuria,

fevers, chills, or recent URI symptoms

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Labs

• CMP– K+ 3.2 (L)

• CBC– WBC 13.3 (H)– Hemoglobin 9 (L)

• LFT’s normal • Lyme titers negative

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Differential Diagnosis • Erythema multiforme (EM)

– HSV: No sx– Mycoplasma: No sx– Strep: ASO (-)– EBV: Monospot negative – Salmonella: No stool cultures

• Erythema chronicum migrans– Lyme: Titers (-)– STARI

• Plan– Treat empirically with ciprofloxacin and doxycycline– Triamcinolone 0.1% ointment BID to skin lesions

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Biopsy of right thigh: Leukocytoclastic vasculitis

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Leukocytoclastic vasculitis (LCV)

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• 3 days later the patient presented for follow up – DIF: negative – Repeat labs

• CBC– WBC normal – Hemoglobin 7.2 (L)

• ESR 88 (H) • CRP 36.5 (H)• ANA (-)• RF, C3 and C4, cryoglobulins normal

Follow-Up

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• Diagnosis: Urticarial Vasculitis – Subtype of small vessel (leukocytoclastic)

vasculitis– Lesions persist for >24 hours– Painful or have a burning sensation– Residual hyperpigmentation as they resolve

• Treatment– Steroid taper + NSAIDs + continue

doxycycline and ciprofloxacin

Follow-Up

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• Overall patient had improved • Repeat labs

– Hemoglobin 6.1• Patient admitted to hospital

– Colonoscopy• External hemorrhoids • Moderate pancolitis• Diagnosis: Ulcerative colitis

• Patient discharged on mesalamine 4.8 grams daily + prednisone 40 mg daily

Follow-Up

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Discussion Points

• Is urticarial vasculitis (UV) associated with ulcerative colitis (UC)?

• Is LCV associated with ulcerative colitis?

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Inflammatory bowel disease

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LCV and UC

• Less than 20 cases of LCV have been reported in patients with UC

• LCV occurs mostly in older patients– Average age: 40 years

• Male predominance of nearly 5:1– EN (more common in women) – PG (no gender predisposition)

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Reported Cases

• Location of LCV– Multiple areas (58%) – Single site (42%)

• The most commonly involved sites– Lower extremities (83%)– Upper extremities (42%)– Buttocks (25%)– Trunk (25%)

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When does LCV occur?– LCV occurred after UC

• 58%• 4 months to 20 years after the initial diagnosis of

UC.– LCV preceded UC

• 33%• 1–18 months.

– LCV occurred synchronously with UC • 8%

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• Extraintestinal skin manifestations– Specific

• Metastatic Crohns– Associated

• Erythema nodosum (EN)• Aphthous ulcers

– Treatment Induced• Anti-TNF agents

– Reactive• Pyoderma gangrenosum (PG)• Sweet’s syndrome• Urticarial Vasculitis

Why do EIMs occur in patients with IBD?

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Inflamed colonic mucosa

Deposition of immune complexes in vascular wall

Fecal antigen exposure to submucosal lymphoid tissue

Immune complexes

Destruction of vascular wall

Complement activation

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Urticarial Vasculitis and Ulcerative Colitis

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Summary • Consider an underlying IBD when persistent skin

leukocytoclastic vasculitis occurs without clinically apparent causes

• Although rare, urticarial vasculitis should be considered as one of the skin manifestations of UC

• Urticarial vasculitis in association with UC can be treated by corticosteroids and/or treating the underlying IBD

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References• Boules, E., and C. Lyon. “Florid Urticarial Vasculitis Heralding a Flare up of Ulcerative

Colitis.” Case Reports, vol. 2014, no. dec22 1, 2014, doi:10.1136/bcr-2014-207141.

• Akbulut S, Ozaslan E, Topal F, Albayrak L, Kayhan B, Efe C. Ulcerative colitis presenting as leukocytoclastic vasculitis of skin. World J Gastroenterol 2008; 14(15): 2448-2450

• Greuter, Thomas, et al. “Skin Manifestations of Inflammatory Bowel Disease.” Clinical Reviews in Allergy & Immunology, 2017, doi:10.1007/s12016-017-8617-4.

• Ahmad et al. “Urticarial vasculitis and associated disorders” Hamad Annals of Allergy, Asthma & Immunology, Volume 118 , Issue 4, 394 – 398.

• Butts, G Tyler et al. “Leukocytoclastic Vasculitis in an Adolescent with Ulcerative Colitis: Report of a Case and Review of the Literature.” SAGE Open Medical Case Reports 2 (2014): 2050313X14547609. PMC. Web. 13 Sept. 2017.

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July 2018

Building & Realizing Value in a Dermatology Practice

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1.

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Why do you want to do this? (exit, grow, merge)Monetize my practice for my retirement Double the size of my practice

a)b)c) Add new revenue streams to my practice (path lab, Mohs,

cosmetics)

2. What is the outcome you want? How will your life bedifferent?a)b)

Cash, retireCash, employment

c) Ownership, practice continuation

3. What is your most likely exit strategy?a)b)c)

Sale to partnersSale to local competitors Sale to other

d) Throw keys on my desk…..4. How much is your exit ‘number’?

a) Did you include your real costs of living?

5. What risks do you face?

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a) Healthb) Practice

6. What do you want to do after the event?a)b)c)

Play GolfWork part time Travel

d) Serve on boards?

7. Who is your planning “A” team? (accountant, legal, planning, management)

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Retention of key physicians and staff after transaction close

Diverse capabilities (medical and cosmetic dermatology, Mohs surgery, and dermatopathology lab offerings)

Size, staffing mix and talents of the provider team

The dollar amount of the practice Earnings Before Interest Expenses, Income Taxes, Depreciation and Amortization Expense + adding back non-recurring

and owner-related expenses (i.e. Adjusted EBITDA)

Key Buyer CriteriaThrough Bundy Group’s work in the Dermatology Market, we have observed several key criteria that buyers are focused on when evaluating an acquisition.

Compliance of the practice with federal and state regulatory guidelines

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Key Components That Increase the Value of a Dermatology Practice

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Practice reviewed or audited financial statements

Adjusted EBITDA margin percentages (1) at 20% orgreater

Geographically based in an attractive market

(1) Adjusted EBITDA Divided by Practice Revenues

Willingness of practice owners and employee physicians to sign employment agreements and/or retain minority equity after a

transaction close

When is the Right Time to Sell?

▪ Practice owner has determined from a personal level that he or she is sufficiently motivated to sell the practice

Owner is prepared to commit to a sales process and discussions with buyers

Optimal Time to Sell

Owner and advisors have assessed the state of the buyer’s market and are confident that a competitive process will yield a successful outcome

Drivers of Valuation

Practice is accomplishing most, if not all, of the goals stated on the key buyer criteria page

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Mergers & Acquisitions Process} The sale of a practice can be divided into a series of stages.} The actual timeline for a Mergers & Acquisitions process depends

on a number of factors, including the following:◦ Motivation levels of the buyer and seller

◦ Speed with which a seller can provide all relevant information

◦ Selling practice fundamentals and issues that buyers need to diligence

◦ Strength, efficiency level, and experience of buyer’s and seller’s legal and M&A advisors

◦ The number of potential buyers actively seeking to acquire the practice

Negotiate with Multiple Buyers

Months 1 – 2 Months 2 – 3 Months 3 – 4 Months 5 – 6

Conduct Diligence

Draft Confidential Marketing Documents

ContactPotentialBuyers

Management Presentations

Sign Offer/ Start Diligence

Continued Diligence /

Close

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Dermatology Market Observations

The Dermatology Market is extremely fragmented as there are nearly 11,000 locations in the United States with 35% operated as solo practices

More practice owners are proactively seeking ways to increase profits, improve efficiency, and build value in their practices

Consolidation of practices and practice acquisitions are rapidly occurring in the Dermatology Market. There are now over 30 private equity groups that have invested in the segment

The Dermatology Market is attractive to buyers due to its recurring patient base and growth opportunities such as Mohs surgical services, in-house pathology capabilities, and cosmetic offerings

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has been acquired by




Sample of Dermatology Transactions



has been acquired byhas been acquired by has been acquired by

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Strategic Options Available

▪ Continue to execute on the practice’s operating plan▪ Maintain existing ownership structureStatus Quo

Selling Options Private Equity Group and Management-Led

Buyout

▪ Sell the practice to anotherdermatology practice or related industry participant

▪ Physician and key employeespartner with Private Equity Group to buy the practice

• Immediate liquidity for current shareholders

• Opportunity for existing owners and key employees to maintain and / or obtain an equity stake in the Practice

Dermatology Practice Owner(s)

Physician-Led Buyout with Financing

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Sale to a Strategic Buyer

▪ A Strategic buyer may be able to better manage the practice’s growth needs.

▪ All shareholders should be able to realize immediate liquidity and value through a sale.

▪ Remaining shareholders may be able to stay active with the practice post-close and realize some of the future value associated with the growth.

Sale to a Strategic Buyer

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ConsiderationsPositives

▪ The practice’s growth plan will likely be replaced by a buyer’s plan. This could include restructuring and cost cutting.

▪ Possibility of physicians and / or shareholdersmaintaining an equity percentage can be lesscompared to other options.

▪ Sell the practice to a dermatology consolidator or another industry provider looking to obtain dermatological capabilities.

Key Questions▪ Does the current owner believe that it can offer growth opportunities?▪ Does the buyer seem to be the “right fit” for your practice?

▪ A Private Equity Group will want existing owners to have discretion and authority in running the practice.

▪ A Private Equity Group with experience in the Dermatology Market can help provide financial and strategic resources to management.

▪ Shareholders have the opportunity to maintain some ownership and share in the upside growth after the practice has been sold.

Sale to a Private Equity Group

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ConsiderationsPositives

▪ A Private Equity Group will hold management accountable for operating the company and increasing the practice’s revenue and profitability.

▪ A Private Equity Group is a medium-term solution and will be focused on selling the practice again in a three to seven year timeframe.

▪ Private equity group, management and / or remaining shareholders partner together to buy the practice from the currentshareholders.

Key Questions▪ Would shareholders be comfortable partnering with a financial investor?

Consolidation of medical and cosmetic dermatology practices continues to occur at an aggressive pace

Negotiating with multiple buyers or investors will provide practice owners with best fit, value and terms

Sellers should continually use the key buyer criteria and key value components in evaluating their practices

Summary

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Questions & Answers

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“You name the price. I’ll name the terms. (And I’ll do better than you every time).”- Anonymous

} What is Transaction Value?◦ Total consideration to owners in an acquisition, which

may include the following: Up front cash amount paid to seller plus Seller Note: Cash amount paid to seller over a period of time

in the form of principal plus interest payments plus Earnout: Cash amount paid to seller in the future based on

the achievement of objectives plus Equity retained by the seller in the practice after transaction

close

Key Mergers & Acquisitions Terms

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} How is a deal structured?◦ How a seller and buyer choose to negotiate◦ The amount, form (i.e., cash, earnout, equity, seller note)

and timing of consideration payments◦ The role of the owners and key physicians post-close

} What is this thing called EBITDA ?◦ Earnings Before Interest Expense, Income Taxes,

Depreciation Expense and Amortization Expense.◦ Considered by sellers and buyers to be a representative

cash flow figure. Will include an adjustment for non-recurring expenses and excess compensation taken out by practice owners


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} Synergies◦ Two companies could be worth more together than

separately◦ One way that buyers can realize synergies is to

consolidate billing services in order to reduce costs


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