Practices may choose to merge for a number of reasons, whether it be to benefit from economies of scale, to provide greater stability and cover, to take on a broader range of services or to take advantage of opportunities which a larger provider can accommodate.
A decision to merge businesses should not be taken lightly and it is important as a first step to ensure that the practices are aligned on a practical and personal level. In addition, practices considering merging should seek the advice of a specialist medical accountant to consider the financial and tax consequences of merging.
Similarly, practice disposals and acquisitions may arise due to single handed practitioners or small partnership choosing to retire or step back from responsibility to deliver the primary care service and may look to local practices, Trusts, GP federations or corporate providers to take over the responsibility to deliver the services and ongoing liabilities.
From a legal perspective, the key issues where we support are:
- Due diligence – to assist each party in understanding what is being taken on and discovering any issues which may need to be resolved, protected against or which may be an obstacle to progressing a merger.
- Merger/business transfer/share purchase documentation – these documents are fundamental in setting out the basis for the merger or acquisition and include all the relevant practical aspects of how the merger will proceed, any conditions and obligations and include appropriate protections against existing liabilities.
- NHS contract changes – this may involve novations (substitution of the parties – a technical new contract award), contract variations or bulk list transfers.
- New governance arrangements – For mergers particularly but also for acquisitions/takeovers, there is likely to be a need to update/replace partnership deed, shareholders/members agreement, Articles, etc.
- Premises – Premises arrangements are one of the biggest areas to consider for takeovers and mergers – whether it be sale of freehold, assigning or grant of a new lease and dealing with lending arrangements.
- Staff and TUPE – a merger or acquisition would be expected to trigger the employers TUPE obligations in respect of the transfer of employees to the acquirer or newly merged entity. It is important to ensure a TUPE information and consultation is carried out in sufficient time.
Practices will also need to consider third party consents including the appropriate ICB approvals and CQC registration changes. Dispensing practices should be mindful of the impact of any changes to their contract on dispensing rights.
We have a team of experienced solicitors who can assist with all aspects of a merger or takeover and can provide a tailored estimate for the work involved on request.
