In the ever-evolving healthcare landscape, mergers and acquisitions (M&A) offer significant growth and sustainability for many organizations. Andrea Turnipseed, co-founder and executive director of Roots Behavioral Health, shares her journey, insights, and lessons learned while navigating M&A in the mental health sector. This article explores her experiences, guiding principles, and big takeaways — like maintaining company culture during transitions.
The Genesis of Roots Behavioral Health
Andrea and her husband founded Roots Behavioral Health in 2016 to meet a pressing need for accessible mental health care in the Austin community.
With backgrounds in therapy and psychiatry, they recognized the challenges patients faced in accessing care. Long appointment wait times — sometimes five months — were frequent due to a lack of available providers. They addressed this gap by hiring additional staff, including nurse practitioners and physician assistants. This allowed them to offer more insurance plans and increase access to care for their community.
Initially, their goal was modest: to create a small practice. However, as demand grew, they expanded their services, including the introduction of ketamine-assisted psychotherapy, making them the first in Texas to offer this innovative treatment.
The M&A Journey
As Roots Behavioral Health grew, private equity firms and venture capitalists became interested in them. By 2021, after successfully scaling to two locations and employing around 50 staff members, they began exploring M&A opportunities.
The decision to pursue M&A was not initially on their radar. They stayed focused on making the best decisions for their business without the intent of selling. This approach allowed them to grow organically while laying the groundwork for future partnerships.
Guiding Principles for Growth
They relied on key principles to guide their decision-making during their growth journey. Here are some of the main takeaways:
- Seek Free Advice: Entrepreneurs must gather as much free advice as possible. Early on, they connected with a broker who provided valuable insights and support without any immediate expectation of a deal.
- Focus on What’s Best for the Business: Make decisions based on your business’s needs rather than on the potential to attract investors. This mindset fostered a culture of authenticity and trust within their organization.
- Organize Documentation: It’s crucial to keep all business documentation organized. This preparation can streamline the due diligence process during M&A.
The Role of a Broker
Working with a broker during the M&A process can make a big difference. Brokers can provide valuable insights, filter potential buyers, and help prepare the necessary documentation. The broker relationship can be long-term, as brokers often work with businesses for years before making a deal.
Having a broker who understood their business and industry was crucial. This relationship allowed them to navigate inquiries from potential buyers and to maintain a strategic focus on their growth objectives.
Working with Family
As a family-owned business, Andrea and her husband bring unique dynamics to their professional relationship. They leverage their shared background in mental health to navigate challenges and communicate effectively.
While working together can strengthen their business, it also presents challenges. Separating work from home life can be difficult, as business conversations often spill into personal time. Setting boundaries is essential to maintaining a healthy work-life balance.
Maintaining Company Culture Post-M&A
Managing company culture is one of the most critical aspects of any M&A process. One of the most important things you can do is uphold transparency and authenticity with employees during transitions.
Fostering a culture of trust makes employees more likely to support and adapt to changes. You must keep staff informed about potential growth and the reasons behind pursuing M&A. This open communication alleviates concerns and builds confidence in the leadership team.
Balancing Investor Expectations and Team Needs
After the M&A transition, Andrea found herself balancing investors’ expectations with her team’s needs. While investors may have specific goals, advocating for the staff and maintaining the culture built over the years is essential.
You want to keep systems consistent and ensure that changes don’t overwhelm employees. That’s why Andrea pushed back against immediate changes to employee benefits. She recognized the need for stability during the transition.
Prioritizing Personal Well-Being
As a mental health professional, Andrea prioritizes personal well-being amid the stresses of M&A. She emphasizes that maintaining a healthy work-life balance is crucial for leaders and their teams.
They weighed the benefits of growth against the potential impact on their personal lives. They recognized that while expansion could provide more opportunities, it could also increase stress and demands on their time.
The Future of Smaller Clinics
Smaller, family-owned clinics will always exist in the healthcare landscape. While larger organizations may dominate in certain areas, smaller practices can provide personalized care.
As the healthcare industry continues to evolve, smaller clinics will need to maintain a focus on patient-centered care and innovative treatments. Andrea’s experience with ketamine-assisted therapy exemplifies the importance of staying ahead of the curve in an ever-changing field.
Advice for Potential M&A Candidates
For those considering M&A in the healthcare sector, Andrea offers several pieces of advice:
- Organize Documentation: Ensure all business documentation is well-organized to facilitate due diligence.
- Assess Opportunity Costs: Reflect on what you hope to achieve through the M&A process and whether it aligns with your long-term goals.
- Trust Your Instincts: Work with partners who share your values and vision. If something feels off, it’s essential to trust your instincts and consider other options.
Continual Learning and Growth
Andrea underscores the importance of continual learning for leaders. She recommends reading widely and seeking out resources that can provide insights into business management and leadership. Two books she found particularly impactful are Simon Sinek’s “Start with Why” and Ben Horowitz’s “The Hard Thing About Hard Things.”
Navigating M&A in the healthcare sector presents unique challenges and opportunities. By prioritizing authenticity, maintaining company culture, and focusing on personal well-being, leaders can successfully transform their organizations while continuing to serve their communities.
