“Hello, this is John Larkin.”
“Hi, John, my name is Jay Pullman and I represent Mirandello investments.”
“Yeah, Barbara, my secretary has been told me that you have called a number of times.”
I had made 13 calls to Barbara over the course of seven weeks trying to speak with John Larkin. John is the CEO of General Memorial Hospital. Based on the research information I have done, this hospital fits the bill for a potential take over target. I am acting as a private equity advisor for a firm out of Chicago, and this is my first conversation with the CEO of “The General”. That’s how Barb refers to it. I have been calling for John to negotiate a partnership or buyout.
I lost my job four months ago. I have been a private equity advisor now for about three months. I have over 20 years of successful experience in start-ups, turn-arounds, and in leading and directing health care operations, so I thought I would give private equity a try. Besides, somehow I met the qualifications and I did not want to let the opportunity pass me by without at least an attempt. The rewards of a deal could be quite remarkable, even if unlikely.
So far it has consisted of about 600 telephone calls to various hospitals and healthcare operations that met my criteria of doing over 100 Million in gross revenue. I have developed first name relations with 50 or so front office people, and I am getting quite comfortable with the idea that a buy out might actually happen. I have even spoken to several CEOs, and since haven’t had an aneurysm, stroke, or a heart attack, there may actually be hope. My skills as a negotiator were improving. I understand that these things never happen until they do, so I am calm as I continue with John.
“Yes, John. I have been talking to Barbara for a number of weeks now.” I gave a salty laugh. “She is really a very qualified assistant. I mean she has kept me at bay for two months.”
John returned my laugh, but his was not as polished as mine. “So, how can I help you?” He wanted to sound direct.
I imagined him sitting at a desk piled with mountains of papers filled with statistics. He was undoubtedly wearing a suit and tie. He sounded the type that kept his jacket on, even when he sat to brace up his bloated torso. I imagined he was calling at the encouragement of Barb whom I had come to know.
“Well, John, as odd as it sounds, I am calling to see if you would be interested in partnering with a private equity firm?” I no longer led with an opening that included being “bought out”.
“Partner with?” He asked.
“Yes, John.” I adjusted the collar on my t-shirt. “I understand that the current environment for hospitals is quite hard. Reimbursements have been declining, and some hospitals similar to the size and nature of yours are looking at ways to weather the storm.”
The line was silent.
Some hospitals need a bit of cash on hand to make payroll, some need outside specialists that are able to look at the operations and improve them with just a few adjustments. Some hospitals,” I was wading into deeper waters, “need to have their senior management teams moved out, but that is pretty rare.”
Actually, I thought to myself, I wondered how any hospital I had spoken with stayed in business.
The line was still quiet.
“John, are you still there?”
“Yes.”
I took the pause after his curt response as an opportunity to continue, “Some hospitals just have trouble recruiting physicians. I have experience in both the recruitment of independent guys and in hiring physician as employees, so if that is the case with you…”
“It’s not.” He said abruptly.
“Oh, no, I didn’t say it was. I said if that was the case with you, but since its not I won’t elaborate.”
“Thanks.”
I chose a pharmaceutical sales approach, “Well, I’m glad that you are not in a situation where your budgets are tight and your cash on hand is low, but if you know of a hospital that is like that, I would appreciate the referral.”
“Yeah, well I can’t think of any off hand,” he faded.
“And you’re sure that you wouldn’t want to have a further discussion about how you could do a joint venture with, or be bought out by, a private equity group.
“No, no. I am sure I.”
“Well, John thanks for your time. If you do think of a hospital that might be in the situation as I have described it, or if you change your mind, Barbara has my contact information.”
“Thanks.”
“You, too. Have a nice day.”
And he hung up. That is not how a conversation with a private equity advisor ends. That is how a conversation with a private equity advisor starts. I set my alert for a month from that day to follow u p with a call and an e-mail to Barbara.
Thanks for reading.