Be optimistic and persistent. Very few professional characteristics trump these.
Rex Burgdorfer has been a leader in the non-profit health system M&A market for more than a decade. His transaction advisory work has been featured in dozens of academic and professional journals.
Juniper Advisory is a specialized investment banking firm that assists management teams and boards of non-profit hospitals to evaluate and execute business combinations. The Firm has assisted more than 200 leading health systems across the U.S. to asses a range of strategic alternatives.
Rex has advised all forms of hospital companies on change-of-control transactions – – academic medical centers, local governments (city, county, borough, district), as well as faith-based, and community sponsored 501(c)3’s. Representative assignments includes: Santa Clara County CA & Verity Health, Beaumont Health and Summa (OH), Conemaugh Health and Marquette General’s sale to the JV between Duke Medicine and LifePoint, Methodist in Peoria, IL and UnityPoint, Platte Valley and SCL in CO, etc. His interest in the nonprofit sector dates back to the 2000’s when the privatization of public infrastructure was in vogue – parking meters, toll roads, garage facilities, container ports, and hospitals.
Rex joined Juniper in 2009 after receiving an MBA from Northwestern and spending the early part of his career at Morgan Stanley. He also moonlights as a venture investor. He sits on the investment committee of Purple Arch Ventures and has been an active angel participant in ~20 start-ups. Many of the entrepreneurs are based in the Midwest and have roots into untapped markets.
Over his career, Rex has published thought leadership pieces in the American Health Law Association, Bond Buyer, Health Financial Management Association, Healthcare Investor, Governance Institute, Becker’s Hospital Review, and others.
Where did the idea for your career come from?
When I was at Morgan Stanley, I observed an outsized focus on a small handful of Fortune 100 Companies. The level of institutional coverage applied to this a small set of ticker symbols struck me as odd. Investment fund managers, research departments, salespeople, traders, and bankers all focused on a limited number of daily red and green arrows moving a few basis points on a Bloomberg terminal. I thought, “there has to be more to this picture.”
So I went back to business school intent on broadening the types of companies that I’d be working with, and to do so in a smaller more nimble environment. Fast forward – I started at Juniper in 2009, a small, privately held M&A boutique where the core clients are independent hospitals. Often they’re located in second tier economic and geographic regions. It opened my eyes to the world beyond the pin-striped Wall Street set.
We help volunteer boards of hospital systems steer the direction of a critically important community asset. These ranged in size from ~$100m to $5b in revenue, so vital locally but a blip relative to the types of companies that bulge bracket firms service.
I found the boards of our client hospitals to be universally populated by well-intended, civic minded people. They came from all walks of life, but were not necessarily experts in healthcare. Without exception, though, they were trying to do what they believed was in the best interest of the hospital – almost always the largest employer in town and leading driver of business activity. I felt we were providing needed advice on how best position and maximize the delivery of medical care. Overall, I’ve found it to be much more rewarding and feel extremely fortunate to work with some of the best executives around.
What does your typical day look like and how do you make it productive?
I’m usually on the road about one day a week. Unlike a consultant, we do most of our work in the office in Chicago and travel to attend a board meeting or make a presentation, then head home. If I’m in town, I’m fortunate and can commute by train – walking on both ends. I’m not a car guy so feel for those who wade through traffic. I’d find that hard.
At Juniper, we start each week with an all-firm Monday morning meeting. We discuss current client engagements, strategy, and any sticky issues associated with a transaction they’re completing. Our team, on average, has close to 25 years of hospital M&A experience – so chances are most any issue has been addressed before. We try to deliver the full intellectual capital of the firm and spend an outsized portion of our days thinking about solutions for our clients.
How do you bring ideas to life?
In the financial services industry and investment banking in particular, it’s hard. We don’t have a widget rolling off an assembly line to admire. Instead, we measure success based on the results of our clients. Are the business combinations we’ve helped to create translating into providing higher quality care at a lower price. That’s the measuring stick. Always the communities we serve are better positioned and better at addressing the populations’ health need – that feels good.
What’s one trend that excites you?
More offensive participants in consolidation transactions. It used to be that a hospital waited until there were no other options other than selling to a larger competitor. They had run out of access to capital, had an imminent need, and for defensive reasons were forced to find a partner. Today, more forward thinking executive teams are looking 5, 10, 15 years down the road and asking how they can provide the best care. That has translated into more innovative structures (e.g. JV’s, JOA’s, etc.) and latitude in contractual relationships.
What is one habit of yours that makes you more productive as an entrepreneur?
Having the confidence to say “I don’t know, but will investigate and get back to you.” People appreciate that. Too many try to dance around an immediate response.
What advice would you give your younger self?
It will all work out. Take a deep breath. Sleep more, drink water, do yoga.
Tell us something that’s true that almost nobody agrees with you on.
The US Hospital industry is still very fragmented and is one of the reasons why we spend a multiple of any other industrialized nation on healthcare and, in aggregate, received pretty mediocre results. The majority of independent community hospital struggle to afford and implement the latest IT systems (which run in the tens of millions of dollars), recruit physicians and do the things that people like Atul Gawande talk about – adhere to checklists, standards, best practice protocols, etc. It’s unattainable absent inclusion in some sort of coordinated network.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Be optimistic and persistent. Very few professional characteristics trump these.
What is one strategy that has helped you grow your business?
Stick to what you’re good at. Focus on the positive and do that. So many business school type performance reviews focus on the negative – weaknesses that could be improved. I think research is coming out that companies should do the exact opposite of that. Identify what an individual does well, and (within reason) let them run with that. This is certainly the case at Juniper where we have chosen to specialize to an extreme degree. Doing so, however, has allowed us to build critical sector expertise and operate free of the conflicts inherent in larger, multi-product firms.
What is one failure you had as an entrepreneur, and how did you overcome it?
Spending time and resources on theoretical future assignments. Perhaps it comes with some mix of maturity and experience, but saying ‘no’ to something that’s unlikely to occur saves everyone heartache. In the long-run, I think clients appreciate that candor and it saves them from a similar spinning wheels unnecessarily.
What is one business idea that you’re willing to give away to our readers?
Look at new business creation in fly-over country. There are so many cultural lessons from the 2016 election that have parallels to our work. One of them is that there is huge demand for things not found in major coastal urban centers.
What is the best $100 you recently spent? What and why?
Changing an airplane departure time on a family trip with a two year old. Well worth it.
What is one piece of software or a web service that helps you be productive?
MSRB Emma. It’s like SEC Edgar but for nonprofit entities. It’s a repository of information – securities offerings, credit ratings, financial audits, etc. Appendix A of an Official Statement is invaluable to understanding a hospital, its market, and competition.
What is the one book that you recommend our community should read and why?
Bowling Alone about the decline of civic engagement in the US.
What is your favorite quote?
Steve Jobs – “Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!'” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.”
- Hospital systems have evolved into major businesses. They should receive the same level of advice that large corporations do when considering M&A transactions.
- Work with clients you like. Life is too short to not enjoy what you do.