South Florida Hospital News
Sunday June 13, 2021

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June 2021 - Volume 17 - Issue 12


Marc Egort: 'Things Evolve Because There's a Need For Them'

According to Marc Egort, "There are quite a few things a CPA gets involved with." Those "things" might even be ones not usually associated with CPA work. For example, a person may not consider that a CPA would be engaged in mergers and acquisitions; but Egort, founder of Marc Egort CPA, P.A., has been handling them for years.

Interestingly, the two can go hand-in-hand and he explained how this evolved into his practice, saying he basically got started by being somebody's accountant. He said a client may indicate he is thinking of selling his business, and Egort will reply, all right, let's talk about it; let's figure out how you're contemplating the valuation, what you think some of the trigger points are, some of the vulnerabilities. "As their CPA, you are in a unique position to assist them with positioning their business for sale and assisting them on the due diligence side. Like anything else in practice, things evolve because there's a need for them. Inevitably it just shows up when you've been practicing as long as I have."
Egort has been in the health care space business for 32 years, with over 30 years in public accounting, starting in a Medicare certified home health agency in 1989. From there he went to work for a boutique CPA firm that specialized in home health reimbursement. He formed his own practice 10 years later. "I became known as a Medicare reimbursement consultant, but the funny thing was, when my clients learned I had a CPA license, they would say 'Oh by the way, I need you to help me with my taxes.' From that it just kind of evolved into an accounting practice, and now we are able to offer more in the way of customized services for our clients."
He said when going over financial information with clients, he occasionally asks about their plans for the future, and they may say that in five or 10 years they want to position the company for sale. His first recommendation is: let's start with your financial statements. "Most of my clients – if they are service businesses – will prepare cash basis financial statements, whereas buyers usually want to see things on an accrual basis. So the first place to start is to make sure they have financial statements that the potential acquirer could use or meet industry standard financial reporting."
Because of his background in the home health market, Egort has a strong presence in the health care space and has worked with quite a number of physicians – both groups as well as solo practitioners. He pointed out how health care clients differ from others when it comes to mergers and acquisitions. "Working with health care is different from companies that rely on sales of inventory. All have varying elements that change the way you would view the valuation approach." He cited a jewelry company as an example, saying it might have $5 million in inventory on their books. "What is that company worth? Using an over-simplistic approach, one could make an argument that because the inventory is the largest asset of the company, its value would dictate the sale; if I'm taking over that company, I'm basically buying that inventory."
On the other hand, physician practices are more likely based on either the number of patients or revenues. Egort said in some cases, the buyer may have a strategic reason for wanting it, or might just want to make an investment in it. "Perhaps they want to get the other group off the market because they're a competitor, or maybe they're taking over a dermatology practice that utilizers lasers, and their investment in that company gives them access to technologies they don't currently have. There are also strategic alliances, simply because a physician wants to retire." He added that there are often intangibles that have to be considered as well, such as the goodwill of the practice, how long the physicians have been involved, or how long they will continue to be involved post-sale.
All of these must be taken into consideration, but Egort said, "The discussion with my clients before they put their company up for sale is often, what's the number that makes you want to walk away from everything. That's an important discussion. It's got to feel good for them to walk away from their life's work and feel as if they've gotten value out of that."
Egort didn't anticipate 25 years ago having his practice expand into areas such as mergers and acquisitions, but as he said, things sometimes evolve because there's a need for them. However, the most important aspect of his business is service. "Service and communication have been the hallmark of our practice for over 30 years."

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