Due Diligence on a Lease Arrangement for Wake Forest Baptist Medical Center to Operate Wilkes Regional Medical Center

Process

In the first phase of the engagement, Veralon completed a valuation calculation of WRMC’s operations. Based on that calculation, WFBMC decided to negotiate for a long-term lease agreement to operate WRMC.  Following these negotiations, the two organizations executed a Letter of Intent to proceed with formal due diligence as a precursor to entering into the lease arrangement.

Veralon was a primary advisor to WFBMC in the due diligence process, serving as lead on seven of the 11 topic areas (financial, medical staff and physician enterprise; compliance; reimbursement and payer contracting; human resources; facilities, equipment, and property; marketing and business development). Other topics were handled by WFBMC Due Diligence Partners (WFBMC Partners). The objectives of the process were to:

• Identify risks and benefits of the proposed transaction
• Consider implications for post-transaction integration
• Form an overall conclusion about the proposed transaction

Veralon collaborated with WFBMC Partners; with the WFBMC Core Team, which consisted of members of WFBMC’s leadership team, as well as legal counsel; and with the combined Operating Team for the transaction, which included in-house subject matter experts from WFBMC, WRMC, and the health system currently managing the hospital. The Operating Team was tasked with post-transaction, implementation-focused efforts.

Data and documents sharing for the due diligence process was facilitated by use of two data rooms, one for general data and accessible by WFBMC Partners, Veralon, and legal counsel, and one containing competitively sensitive data that was accessible only by Veralon and legal counsel.

Interviews were jointly conducted by Veralon and WFBMC Partners.