Services
Market Research
As a fundamental part of our assessments we survey and interview several thousand physicians, medical providers, medical facility administrators, and payors annually. Shenkan Advisors recruits the participants for our research and analyzes the data for our clients. This qualitative and quantitative primary research is incorporated into our financial models and rigorous financial analysis. We include our clients in our research process and this builds their conviction to act on our recommendations and delivers results.
M&A Screening
Management teams often ask us to identify and screen companies to acquire. This utilizes our previous experience working for J.P. Morgan and other investment banks to understand the accretion and dilution from acquisitions and how investors will view the transactions. We apply our business development, marketing, and sales experience to help management to determine what deals can be integrated most successfully, result in the most financial synergies, and improve the company’s strategic position in the market.
We work with the internal team to augment the company’s analysis capabilities and to enable the company to have dedicated resources for the project. We help companies to develop criteria for screening companies to acquire. After gaining agreement from the management team on the acquisition criteria, we rank and weight the criteria. Next we profile and rank acquisition candidate companies against this criteria as part of a proactive screen. Later we perform a deep dive into select companies including financial analysis, strategic fit analysis, and valuation analysis. We also plan a roadmap for the M&A due diligence process specific to each target company. This enables the acquirer to be very thoughtful and not waste time or company resources before signing a letter of intent. Our preliminary deep dive enables the acquirer to identify what to include in the letter of intent and can streamline the due diligence process. We usually stay involved with the transaction and perform confirmatory due diligence.
Due Diligence on Acquisitions or Investments
We begin projects with a deep level of understanding of healthcare companies and markets through our experience working for investment banks including J.P. Morgan following healthcare companies. Our founder has over 25 years of experience working with HMOs, hospital chains, pharmaceutical, medtech, and diagnostic companies. In order to stay current on market trends, we attend more than a dozen medical conferences a year across sectors including orthopedics, cardiology, general surgery, radiation, oncology, dermatology, ophthalmology, diagnostics, diabetes, neurology, and stroke. Our previous healthcare experience enables us to complete a full analysis quickly to accommodate an M&A process.
We help private equity investors and companies make better investment decisions. We become trusted long-term advisors because of our unique and rigorous process of analyzing companies. In order to value the company and understand the cash flows we perform primary research with physicians and other healthcare providers, facility administrators, and insurers to a build a proprietary financial model unique to each deal. This data and financial model enables us to conduct a comprehensive analysis of the market and competition.
Our primary research and financial analysis enables our clients to better understand the acquisitions and include milestone payments to mitigate risks for the acquirer. We also value the target company from the viewpoint of all other bidding acquirers. This enables our client to be more disciplined with their offer.
Our involvement with investments continues after the acquisition as we develop the strategy for the business which includes how to create long-term value for the company and a roadmap for bolt-on acquisitions. As the company executes the acquisition strategy we stay involved and provide future due diligence on complementary acquisitions.
Strategic Assessments and Capital Allocation Analysis
Our independent strategic assessment helps the board and/or management team to better understand critical issues and to determine how best to proceed. We perform primary market research with physicians, other healthcare providers, facility administrators, and insurers to a build a proprietary financial model and then to analyze the company, its market and the competition. We include the company and the Board in the research process. This enables them to trust the data and make strategic decisions with confidence.
Our analysis helps companies and boards determine how to best allocate capital. We can help the company to determine whether to fund a clinical trial, invest in market development, pursue reimbursement for a product, enter new markets, or to partner or independently market a product. We assess the industry trends and compare the company’s current and future positions in the market. We pressure test the changes needed in order to realize the company’s potential. Our sensitivity analysis quantifies and clarifies the issues and helps the board and/or management to better understand the current and future value of the company to acquirers and investors.
Strategic Marketing and Pricing Analysis
Shenkan Advisors assists companies to develop their strategic marketing plans for markets where they currently have products and also for new markets. Our market assessments include market size, penetration, share, growth, and segmentation. We survey and interview several thousand physicians, other medical providers, medical facility administrators, and payors annually as part of our market and company assessments. This primary data is utilized to build our financial model. Through our analysis we make recommendations on pricing, reimbursement strategies, product design, and clinical data needs for market adoption. We include the client in the analysis process which enables them to trust the data and to take decisive action following the analysis. Including the client in the research ensures the final analysis meets the client’s needs and enables us to quickly modify the project if needed.
White Space Evaluation
White spaces are markets where the investor or company does not currently have an investment or product and seeks to better understand the market. For an orthopedic medical technology company a white space could be the cardiovascular market. For a private equity investor, a white space could be investing in hospitals if they currently do not own any hospitals. A white space might also be a novel product platform that is being developed to create a new market. Robotic surgery was a white space when Intuitive Surgical developed the first surgical robots.
White space analysis require us to predict the future, and therefore requires substantial primary research. Our white space evaluations enable the company and investors to quantify the financial and strategic risks and rewards involved in entering the market. We detail the market size and growth rates, competitive landscape, and expected trends and changes in the market.
Our primary research enables our clients to have a unique investment thesis and viewpoint on the market and company. To fully understand the market, competitors, and the company, we usually perform a quantitative analysis with 1,000-3,000 physicians and other medical providers, facility administrators, and payors. Our qualitative research includes 100-300 interviews with physicians and other medical providers, facility administrators, and payors. By combining our quantitative and qualitative research with financial analysis, we develop unique perspectives on the market and enable our clients to enter or avoid markets with conviction.
Exit Planning
Our exit analysis includes valuation and determining when and how to best exit a business. Common exit strategies may include sale of the company or division to a strategic acquirer, private equity firm, or IPO. We perform primary market research with physicians and other healthcare providers, facility administrators, and insurers to a build a proprietary financial model and then to analyze the company, its market and the competition.
Our independence is critical to performing unbiased research and analysis. Our experience covering healthcare companies as a financial analyst for J.P. Morgan and other investment banks and recommending when mutual fund and hedge fund investors should buy or sell healthcare stocks gives us a unique perspective when analyzing companies. This analysis helps our clients make more informed critical decisions and to gain agreement by the full Board or management team.
