Exit payments

This part provides information for pharmacy contractors on exit payments to be paid to contractors who decide no longer to provide pharmaceutical services from the pharmacy. 

LBO financings require a healthy cash flow for interest payments and repayments of debt tranches. The net debt position also determines the equity value that can be realized for financial sponsors on exit. The two major levers for improved cash flow management are working capital management and a disciplined capital expenditure program. 

The needs of all parties should be addressed in the contractual agreements. These contracts may be inexpensive to enter but extremely expensive to exit. Contracts should define intermediate consequences—generally penalties—for poor behavior and performance, with termination of the contract only as a last resort. Additional payments should be provided to reward superior performance that provides a measurable benefit. 

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