Why Repricing Happens in Healthcare M&A and How Sellers Can Avoid It

Volume 12, Issue 16, August 12, 2025

By: Gene Quigley

If you're planning to sell your healthcare business, there's a good chance that the price you agree to at the outset won't be the price you see at closing. According to a 2021 study by the American Bar Association, a staggering 82% of private company mergers and acquisitions (M&A) transactions included a pre-close price change. In other words, repricing isn't usually the exception. It's generally the rule.

As a healthcare M&A advisor, I've seen firsthand how repricing can derail deal value, create tension between buyers and sellers, and sometimes even cause a transaction to fall apart altogether.

The good news? While not all repricing can be prevented, much of it can be anticipated. In many cases, it can be avoided.

Let's look at why repricing happens, what it typically means for sellers, and the steps you can take to minimize the risk when it comes time to sell your healthcare business.

Why So Many Healthcare Deals Get Repriced

Repricing happens for a number of reasons, and not all of them are within the seller's control. However, understanding the most common causes is a crucial step toward managing the risk.

One of the biggest drivers is working capital. Many healthcare sellers underestimate how large a working capital adjustment can be, especially if they haven't taken time to benchmark the right working capital target based on normalized historical trends. Buyers typically want enough working capital left in the business to keep operations running following the close of a transaction, and if their calculation differs from the seller's, the difference gets priced in.

Another frequent reason for repricing is a change in the business's performance during the deal process. Factors like a slower quarter, an unexpected loss of a key contract, higher-than-expected staff turnover, or supply chain disruption can all trigger concern and prompt buyers to reassess valuation.

Then there are the unavoidable curveballs, such as due diligence findings, financing delays, or changes in regulatory or market conditions, that will shift the buyer's perception of risk. If the deal takes months to close, even macroeconomic developments, like a rise in interest rates, can compel a buyer to revisit pricing.

What Repricing Actually Looks Like

Repricing doesn't always mean a straight drop in purchase price, though that's certainly one possible outcome. More often, it changes the structure of the deal itself.

In many cases, the buyer will still offer the original headline value, but with different terms. A higher percentage of the purchase price may be pushed into an earnout, making it contingent on future performance. Alternatively, the mix of consideration might change — for example, shifting from a cash-heavy deal to one that includes stock and/or deferred payments.

Sometimes, repricing involves renegotiating non-economic terms as well, such as the seller's post-close obligations. In some situations, the deal gets called off entirely, especially if the repricing gap is too wide or trust between the parties erodes.

The reality is that repricing tends to benefit the buyer more than the seller. Once you're under a letter of intent (LOI), your options narrow. Sellers often feel pressure to accept changes rather than start over, especially after months of emotional and financial investment, and the fear of going through the process again only to face more repricing or a lower offer.

What Sellers Can Do to Avoid Repricing

While you can't control market conditions or a buyer's financing, you can take proactive steps to reduce the likelihood of repricing and strengthen your negotiating position if it does come up. Here are some of the steps I recommend sellers take who want to protect their deal value:

• Conduct thorough sell-side due diligence. Don't wait for the buyer to uncover issues. Conduct your own diligence before going to market so you can spot — and then resolve — problems early.
• Develop a robust, credible CIM. A well-crafted confidential information memorandum (CIM) that tells a professional, positive, and transparent story about your business sets the tone for the deal and helps prevent misunderstandings as the transaction proceeds.
• Minimize the signing-to-closing gap. The longer the window between signing an LOI and closing the deal, the more opportunity there is for repricing events to emerge.
• Pre-negotiate critical adjustments. Where possible, address working capital targets, earnout parameters, and other key terms upfront in the LOI.
• Consider locking in pricing. Fixed purchase price mechanisms can limit exposure to future adjustments, though they're not always feasible. Work with a mergers and acquisitions advisory firm to understand and properly weigh the pros and cons.
• Provide an independent quality of earnings (QofE). A sell-side QofE report can increase buyer confidence, accelerate diligence, and often help avoid last-minute surprises that may lead to repricing.

Ultimately, the best defense against repricing is preparation as well as collaboration with experienced healthcare M&A advisors. Buyers will always look for ways to de-risk their investment. They would be foolish not to. As a seller, your job is to anticipate those concerns, address them proactively, and enter the process with clear, defensible numbers and a compelling narrative that discourages any deal-jeopardizing revisions.

Repricing Is Common in Healthcare M&A, But It Doesn't Need to Be Inevitable

It's easy to assume that repricing is simply part of the healthcare M&A process. As the statistic mentioned at the beginning of this column shows, it's certainly prevalent. But that doesn't mean it's unavoidable. With the right preparation and guidance, sellers can enter negotiations with confidence, set better expectations, and increase the odds of closing at the price they and their business deserves.

If you are planning to sell your healthcare business and want to steer clear of the pitfalls of repricing, reach out. I help sellers navigate every stage of the transaction, from due diligence through close, with a sharp focus on preserving value and, when the opportunity allows, maximizing it. Let's discuss how to make your exit smooth, successful, and free from surprises that can be prevented.

Gene Quigley

For over 20 years I have served as a commercial growth executive in several PE-backed and public healthcare companies such as Schering-Plough, Bayer, CCS Medical, Byram Healthcare, Numotion, and most recently as the Chief Revenue Officer at Home Care Delivered. As an operator, I have dedicated my career to driving value creation through exponential revenue and profit growth, while also building cultures that empower people to thrive in competitive environments. My passion for creating deals has helped many companies’ platform and scale with highly successful Mergers and Acquisitions.

At VERTESS, I am a Managing Director with extensive expertise in HME/DME, Diagnostics, and Medical Devices within the US and international marketplace, where I bring hands on experience and knowledge for the business owners I am privileged to represent.

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Email Gene Quigley or Call: (732) 600-3297