Protiviti assists clients by performing
acquisition due diligence for a 50,000 member Medicaid/Medicare health plan
Litigation, Restructuring & Investigative Services – M&A Due
Diligence
Client Challenge
A large hospital system and national health insurer were forming a joint venture to acquire a regional
50,000-member Medicaid/Medicare health plan subsidiary. The two organizations needed comprehensive
due diligence services on financial data, finance and accounting processes, and information technology. They
called on Protiviti to assist with this effort.
POWERFUL INSIGHTS
We undertook the following activities on behalf of our clients:
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Formulated a detailed due diligence work plan based on the clients’ needs in three areas: financial
data, finance and accounting processes, and information technology.
Assembled a comprehensive due diligence team, including healthcare subject-matter experts, to
execute a scoping plan in the three major areas identified.
Met onsite at the health plan’s location, interviewed key target management and personnel, and
requested and reviewed critical financial and operational information.
Analyzed the health plan’s quality of earnings, quality of assets, historical revenue and profitability
trends, and performance versus budget.
Assessed the adequacy of and current weaknesses within the finance and accounting process
functions, including financial reporting, revenue and expense cycles.
Evaluated the current IT infrastructure, prepared analysis of software and licensing requirements, and
anticipated costs for the health plan to operate as a stand-alone entity.
PROVEN DELIVERY
Our due diligence report enabled our clients to complete the due diligence process within the required
timeframe to avoid potential forfeiture of a US$1 million deposit. We also identified business risks and areas
of concern regarding the future profitability of the health plan and provided a basis for our clients to analyze
the deal’s economics appropriately at the initially agreed-upon US$30 million acquisition price.
Our insights provided the clients with information to make well-informed decisions regarding the value of the
health plan. This allowed our clients to commence renegotiations regarding the acquisition.
How We Help Companies Succeed
Protiviti’s due diligence consultants help organizations evaluate the financial, commercial, regulatory
and technological situations of potential merger candidates and understand the opportunities and
challenges that may arise from a merger.
Mergers and acquisitions (M&A) transactions are among the most complex activities a business can
undertake. In today’s global market, where not all information is transparent, these transactions present
an even greater challenge. Companies include a substantial part of their value creation/synergy targets
in the acquisition purchase price. Due to expected future defaults and economic issues, management –
more than ever before – wants to quantify the risk of not being able to meet those targets.
Our M&A team includes auditors, former regulators, forensic accountants and technology experts who
provide investigative analyses of businesses including background history, results/projections, cash
flows, market analysis, management information, commercial and operational issues, and systems and
controls.
Companies with any of the following indicators will benefit from our services:
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Planned or contemplated acquisitions or divestitures
Lack of liquidity and/or need for capital or refinancing
Need for assessment of finance and accounting processes and systems
Need for assessment of information technology infrastructure
Contacts
Charles Goldstein
+1.410.454.6830
charles.goldstein@protiviti.com
Charlie Soranno
+1.732.326.4518
charles.soranno@protiviti.com
Byron Traynor
+1.786.264.7166
byron.traynor@protiviti.com
Todd McCavit
+1.469.374.2468
todd.mccavit@protiviti.com
About Protiviti
Protiviti (www.protiviti.com) is a global consulting firm that helps companies solve problems in finance,
technology, operations, governance, risk and internal audit. Through our network of more than 70
offices in over 20 countries, we have served more than 35 percent of FORTUNE® 1000 and Global 500
companies. We also work with smaller, growing companies, including those looking to go public, as well
as with government agencies.
Protiviti is a wholly owned subsidiary of Robert Half International Inc. (NYSE: RHI). Founded in 1948,
Robert Half International is a member of the S&P 500 index.
©2012 Protiviti Inc. An Equal Opportunity Employer. PRO-PKIC-1012-065
Protiviti is not licensed or registered as a public accounting firm and does
not issue opinions on financial statements or offer attestation services.