Healthcare Services Deals: Working Capital Adjustments Done Right
Negotiating Working Capital Adjustments on healthcare services deals, with the structure protection and capital connectivity an independent sponsor actually needs.
Every healthcare services acquisition has its own gravity. Working Capital Adjustments is the workstream where independent sponsor counsel earns the seat.
The typical healthcare services platform sits at $15M to $120M EV with EBITDA in the $3M to $20M range. The thesis runs on roll-up of physician practices and ancillary service lines. Most off-market healthcare deals come through advisors who have seen the structure before. Have one in your call list.
How Working Capital Adjustments actually gets structured.
Set the peg based on a trailing 12-month average, normalized for seasonality.
Define each line item in the schedule, especially deferred revenue and accrued vacation.
Cap the dispute resolution timeline at 30 days post-close.
Build a true-up payment mechanism funded out of escrow.
In healthcare services, layer in PC/MSO structuring as part of the Working Capital Adjustments workstream.
Using an unadjusted average that ignores seasonality. You pay twice for the same cash.
"Working capital is where deals are won or re-traded after LOI. Read every line of the schedule."Jason Powell · Working Capital Adjustments
The deal is one thing. The capital that opens up after close is another.
Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.
Related deal pages.
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Representation & Warranty Insurance for Healthcare Services
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Indemnification for Healthcare Services
The seller's contractual promise to compensate the buyer for breaches of representations, covenants, and spec…
Quality of Earnings for Healthcare Services
The buyer's accounting diligence report normalizing earnings, working capital, and pro-forma performance.
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Working Capital Adjustments for Healthcare Services, on independent sponsor terms.
Independent sponsor counsel that already speaks fluent deal-by-deal economics, structures clean LPAs, and travels with capital markets relationships for what comes after close.