Case Study: Navigating Ownership Succession in a Healthcare Technology Company

Case Study: Navigating Ownership Succession in a Healthcare Technology Company


Our client was the founder, majority shareholder, and CEO of a software company that provides cost accounting and contract revenue optimization to hospitals and other healthcare providers. The client was preparing to retire and sell the company to two executives who had long tenure in the company.

The company is well-established, profitable, and has many long-term customers.  The employee base is relatively small, but has little turnover, and employees are very knowledgeable about customer needs.


  • Valuation
    • The owner and prospective acquirers could not agree on a valuation.
    • Previously, they contracted with a local accountant who had done valuations for “main street” businesses. The accountant did not have business experience in either the technology or healthcare industries and had never valued companies in the healthcare technology space.
    • The accountant produced a low valuation based on local market conditions. The owner did not accept the valuation as fair.
  • Family Dynamics
    • The current owner and prospective acquirers were members of the same family.
    • Business sale negotiation was putting a strain on family relationships.
  • Management Philosophy
    • The owner was a traditionalist in terms of sales and marketing approach and was very conservative financially.
    • The prospective acquirers felt that the company needed to modernize its sales and marketing approach and its technology platform to address a changing business climate and industry norms.
    • The acquirers felt that they needed a free hand to make changes without the founder having the option to second guess or over-rule their decisions.
  • Desire to Retain Majority Ownership “in the family”
    • Both the seller and the acquirers wanted to keep majority ownership of the company within the family. However, the seller was prepared to entertain an outside sale if they couldn’t come to terms recognizing the full value of the business he had created.


The owner engaged the Austin Dale Group to help them determine fair market value for the company and to provide advice in negotiating a deal that would support a win-win outcome for all stakeholders.


The Austin Dale Group produced a fair market valuation of the company, utilizing our expertise in company valuations and our extensive knowledge of the healthcare technology industry.  Our expertise gave all stakeholders confidence that the valuation fairly represented current market conditions and the potential for the company for acquirers.

We had individual discussions with the stakeholders to determine their goals and opportunities for compromise.  We provided advice on how a deal could be structured that would:

  • Recognize the value of the asset created by the founder
  • Allow the acquirers a free-hand in driving company strategy post-sale
  • Retain majority ownership in the family
  • Provide financing options that would not create an unsustainable debt load for the company
  • Maintain positive relationships between family members

We also identified potential funding sources and contacts from institutions and private equity firms that focused on healthcare and were willing to consider minority equity investments.

The result was a path forward for the company and the stakeholders to achieve their individual goals in a win-win fashion.