M&A Perspective from Cox Medical Center Bransona subsidiary of CoxHealth(Formerly Skaggs Regional Medical Center)

William Mahoney, FACHECox Medical Center Branson President/CEO

Missouri Office of Rural Health ConferenceColumbia, Missouri

June 5, 2013

Independent or Relevant?

“By the way, being independentIs not a strategy”

Pressures We Face

National Issues (Economy, PPACA, etc.)

Our Hospital (Aging Facilities, Poor Payor Mix,

Instability, Competition, no built-in economies of

scale, seasonal fluctuations, etc.)

Board and 107 Trustees Extremely Independent

What does Relevant look like?

• Improved ability to recruit providers• Access to needed Capital• Enhanced healthcare in our community• Economies of scale• Jobs in Community

The Search Process7-8 Months

Hired PYA (Pershing Yoakley & Associates, PC)Sent out self-directed RFPsInterviewed 5 organizationsShared visits and evaluationChose 2 finalists (visited their hospitals,

hosted them at our hospital)

5

End Result

• Chose CoxHealth from Springfieldo Economies of Scaleo Solid Cultureo Regional Focuso Good Financial offer, but not the best oneo Seats at the table – long-term thinking

Key Takeaways• Hire a good attorney, good M&A firm and good PR

firm• Due Diligence will uncover holes in your system –

review yourself• Protect senior team from the onset• Over communicate to all stakeholders• Keep whole board engaged• Be prepared – Operations will suffer• Deal Points: Begin with the end in mind.

Questions