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MediEstates - Optimising your practice value
Optimising your practice value

Optimising your practice value


With changes to the dental landscape becoming more obvious, when it comes to the question of selling your practice the options are wide and varied. In these cases, the question of who advises you on such matters can make a big difference in optimising the value of your practice.
Currently, there are a variety of private equity companies aggressively moving into the dental sector, these, along with the long-established corporates that are expanding their footprint are changing the dental landscape. With this exponential growth, those dentists looking to sell their practice have more choice than ever before. However, knowing how and when to accomplish a sale for the optimum price can be daunting and indecision often leads to no decision, stalemate and a missed opportunity.

Sourcing advice
Many dentists, used to dealing with clinical rather than business matters, can be overwhelmed at the prospect of lawyers and accountants, so choosing the right adviser, broker or consultant is essential to ensuring a smooth and profitable process. Let’s not forget that even Cristiano Ronaldo has a coach/manager to advise him on how to make the most of his potential.
There are some basic criteria you should always look for when sourcing advice; your adviser must have an indepth understanding of the market, be able to identify an ideal match between buyer and seller, and they must appreciate the motivations, desires, and the philosophy of each party. You should also remember that the transaction itself is a one-off event, but post-transaction and during the transition phase, it is often the case that both parties may have to work with each other for a specified amount of time, so the better matched the parties are, the easier the transition phase is.
Of course, it is ultimately the responsibility of each party to make appropriate choices, but it is invaluable if the adviser is able to solve problems, identify barriers, and deal with objections and issues. The process and resultant solutions are usually a sign of how well the parties are matched and therefore are an indication of how well they will operate and work with each other post transaction. The adviser is in a unique position, able to understand how the problems and solutions are communicated and received and ensure this process is smooth and streamlined.



Indecision often leads to no decision, stalemate and a missed opportunity





Valuations
The arrival of venture capitalists into the UK dental market in recent years has brought with it a host of new advisers, relying on their ‘background in dentistry’ to attract sellers. An adviser chosen by a practice principal to help with a sale or purchase needs years of experience in practice sales that includes both dentist-to-dentist transactions as well as experience of corporate sales. So, whilst years as a supply rep, banker, accountant or lawyer may look good at first glance, it is arguable as to how much this experience has prepared them for a practice sale to a corporate organisation. It is certainly the case that many so called advisers lack the necessary experience to deal with this type of sale, resulting in a lower purchase price or worse still, no sale at all.
You should question the commitment from your adviser and ensure that their role is more than just as an introducer. An adviser worth their money will be a constant participant, leading you throughout the process. Ask for references to ensure your adviser has the knowledge required to see you through every stage, right up to and including closure.
Most purchases, particularly those involving corporates will use an EBITDA valuation. This is an extensive and thorough process that always takes into account the postsale picture for the buyer. You should make sure you run your own EBITDA calculation in conjunction with your adviser, so that expectations are realistic from the outset. Many dentists are disappointed with the sale price of a practice because their expectations have been missmanaged due to an initial valuation being set too high by their adviser. Every buyer will have different allowances within their valuation process and your adviser needs to know the differences and have the knowledge and ability to run the valuation based on what the buyer is looking for.
When buying or selling a practice, my advice is to choose your broker carefully. Ask questions about their background and experience and recognise their ability to represent you, or otherwise.
As more and more corporates start to dominate the market, the growth in the consultant/adviser market will also grow. But for a dentist looking to sell, this is often a once-in-a-lifetime opportunity, to realise the value of your life’s work and the final decision needs to be yours.
Posted by: Dean Barker on 04 Jan 2018

General Buyer Terms 

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Business
    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 1998. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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