SunWest Medical Services

By Christopher Flanagan, Charles Holloway
2002 | Case No. E107
This case examines the myriad of issues faced by two entrepreneurs who use the “search fund” model to search for, purchase, and ultimately operate a home health care services company. The “search fund” is a proven investment vehicle through which a group of experienced investors support the efforts of aspiring entrepreneurs who wish to buy and run a small company, despite their lack of operating experience. After an arduous 3-year search, Peter Landry, Paul Brooke, and a group of investors purchased SunWest Medical Services. However, shortly after the deal closed, Landry and Brooke realized that SunWest was a different company from the one they thought they had purchased. Among other things, the company was not as profitable, and was shrinking rather than growing. The case is rich with issues tracked over an 11-year period, which include: the process of searching for a company to acquire; conducting due diligence; dealing with sellers and bankers, both before and after a sale closes; issues and challenges in having an operating partner; keeping a struggling company alive; growing a company’s sales; changing a company’s strategy; changing a company’s organization structure; and making strategic acquisitions. The case concludes with a review of ways an entrepreneur might best balance his personal career interests with the financial interests of his investors.
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