Mergers and Acquisitions as a Strategic Function 2017 Spring Conference May 18th, 2017 11:00am - noon Blue Harbor Resort, Sheboygan, WI

Thomas N. Shorter, JD, FACHE Godfrey & Kahn, S.C. Madison, WI Moderator: Thomas N. Shorter, JD, FACHE Godfrey & Kahn, S.C. Madison, WI Panel: Mark Herzog, FACHE, President & CEO Holy Family Memorial Manitowoc, WI Jed Roher, JD

Phases of the Process Strategic Plan Deal Process

Significant components of the strategic planning phase Mark Herzog What is the starting point? Why invest in the planning before deciding a course? 3. Is it about a single deal or a broader relationship?

Strategic Relationship – Logic Path What Why When How Who Source: 2016 Newpoint Healthcare Advisors, LLC Mark Herzog When considering a strategic relationship, what questions are addressed and how do they create a path or roadmap? How does national healthcare policy drive strategic relationship conversations? Will AHCA affect how to analyze strategic relationships?

Strategic Relationship Expectations Compatibility Control Relationship Benefits Interrelationship enhancements Mark Herzog 1. What are the “key” factors to consider? Source: 2016 Newpoint Health Advisors, LLC

OTHER FOCUS (Organizational Intelligence) OUTER FOCUS (Partnership Intelligence) OTHER FOCUS (Organizational Intelligence) OTHER FOCUS (Behavioral Intelligence) INNER FOCUS (Emotional Intelligence) Mark Herzog 1. Explain how focus drives decision-making?

The Spectrum Affiliation Inter-Dependence Ownership Transfer Contract Participate Join Service Integration Clinical Integration Financial Integration Modifies Operations Governance ‘by Risk’ Governance ‘by HQ’ Reward: Efficiencies Reward: Value Reward: Capital No Help with Capital Needs Change Behavior Old School ‘Deal’ Mark Herzog How do you see the “spectrum” of options? Mark/Jed Roher What are the types of “M&A” deals out there? How does objective of strategic planning drive the deal type? Source: 2016 Newpoint Health Advisors, LLC

Significant components of the deal process Jed Roher

Key components of the affiliation process LOI Diligence Deal documents Jed Roher 1. Describe the process to be anticipated.

Key People Internal External Financial Lawyers Business Unit Environmental Legal Accountants Senior Leadership Investment Bankers Valuation Consultants

What activities should a CFO pursue when there is no active process What activities should a CFO pursue when there is no active process? What is the role of the CFO during a transaction process? Jed Roher -

Thank You Mark Herzog, FACHE President & CEO Holy Family Memorial 2300 Western Avenue Manitowoc, WI 54221-1450 mherzog@hfmhealth.org Thomas N. Shorter, JD, FACHE Shareholder Godfrey & Kahn, S.C. One East Main Street, Suite 500 Madison, WI 53703 (608) 284-2239 tshorter@gklaw.com Jed Roher, JD Shareholder Godfrey & Kahn, S.C. One East Main Street, Suite 500 Madison, WI 53703 (608) 284-2269 jroher@gklaw.com