McFaul scuttles stubborn sale buzz – Bill McFaul, co-owner of McFaul & Lyons Inc

Bill McFaul, co-owner of the ofttimes controversial, Trenton, N.J.-based hospital consulting group that bears his name, scotched persistent rumors that swirled in Atlanta recently that his McFaul & Lyons Inc. is about to be sold. The latest speculation was that the most likely buyer this time around is a division of New Brunswick, N.J.-based Johnson &Johnson. J&J Health Care Systems Inc. operates an extensive consulting and services program that would appear to be a good fit with MLI’s brand of expertise.

Earlier rumors mentioned possible buyers such as Allegiance Corp., McGaw Park, Ill., Servicemaster, Downers Grove, Ill., and even the American Society for Healthcare Materials Management, or ASHMM. McFaul stopped short, however, of denying the company would be sold to some party, though he insisted neither he nor his partner Diana Lyons have ever actively offered MLI for sale. “We’re not looking for anyone to buy our firm,” he said. McFaul said he receives “about a call a month” concerning a possible sale. In Atlanta last month, Lyons also denied sale rumors.

Through the 1980s and especially into the 1990s, McFaul & Lyons has been a powerful, near legendary force in assisting hospitals reduce non-salary expenses. Driven by the leadership of its co-founders, the company quickly grew in concert with rejuvenated interest by the nation’s acute care hospitals in cost-reduction. Hundreds of facilities have paid MLI’s team of clinicians and financial experts to assist with process enhancement, expense reductions and product evaluation. MLI recently signed a series of strategic alliances McFaul says are valued at about $4 million with operations like ECRI, Plymouth Meeting, Pa.; GATX Logistics Inc., Jacksonville, Fla., and QuadraMed Corp., Larkspur, Calif.

The company employs approximately 200 people full-time, plus 15 or 20 others on an outsourcing basis, many of them nurses. About 60 of those staffers work on a telecommuting basis. MLI also opened several satellite offices in executive suites in places like Dallas and Charlotte, N.C., to augment busy offices in Trenton, Cincinnati, and Santa Ana, Calif., plus another in Toronto, Ont., Canada. McFaul also denied rumors that MLI had been trimming his staff and said 12 new people are scheduled to be hired in the coming weeks.

Several key staff members have exited the company in recent years and McFaul blames many of the recent sale rumors on several of those past staffers. McFaul himself, a widely known figure in both hospital and industry circles, scaled back his day-to-day duties about two years ago, but continues to write and make many appearances on the seminar circuit.

Materials managers at last month’s ASHMM meeting were less surprised at a possible sale of McFaul & Lyons Inc. than they were at the identity of the rumored buyer. Johnson & Johnson or any other manufacturer, they felt, would compromise the objectivity and credibility built and enjoyed by MLI in its product recommendations and other activities. How J&J or any other non-consultant owner of MLI deals with such a feeling is open to question.

COPYRIGHT 1997 J.B. Lippincott Company

COPYRIGHT 2004 Gale Group

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