A few months ago, Bob Livonius and his leadership team at
Nursefinders Inc. targeted a promising company for purchase. The
initiative was by no means unusual at the growing family of health
care staffing providers. Livonius had already overseen a number of
acquisitions since coming on as CEO in August 2003. And he’d
overseen approximately 40 at another company in the 12 years
prior. So when the targeted company’s executives presented him
with strong financials and an enthusiastic pitch, Livonius didn’t
immediately sign off. He insisted on drilling down deeper.
“We thought we had a very strong candidate,” he says. “The
financials looked really good. (But) once we were finally permitted to go and visit some of the people down below, we were very
unimpressed. There was not nearly the strong motivating attitude
that we would have expected, that we saw from the leadership
team. You couldn’t feel that at all when you walked through and
talked to people on the floor. It was pretty obvious that (the leadership team) was dressing it up for sale and that they didn’t really
have strong operational expertise.”
After that encounter, Livonius and his team passed on the
opportunity and focused their attention toward other
prospects.
He says you can’t acquire every promising lead that presents
itself. A successful merger or acquisition requires considerable
due diligence on the front end, combined with the discipline to
step away if certain warning signs present themselves. Though
you’ll inevitably pass on many opportunities working within
the framework — Livonius says he passes on approximately
two to three such opportunities every month — your company
will reap the benefits when you eventually jump on the right
opportunity.
In April, for example, Livonius added Resources On Call to
Nursefinders’ family of eight existing brands. The allied
staffing company specializes in staffing imaging and medical
laboratory technologists, a growing industry segment with
plenty of untapped market share. Despite this obvious draw,
Livonius didn’t hastily jump on this opportunity either. Instead,
he approached it with the same, calculated methodology that
has boosted the 1,039-employee company’s combined revenue
from $224 million in 2005 to $418 million in 2007.
Here’s how Livonius weeds out the pretenders to acquire the
best prospects in the industry.
