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HS Financial Services - Trading One Family For Another
Trading One Family For Another

Trading one family for another


Mediholdings is an umbrella for a group of family-run businesses that have grown and developed within the dental market for over 16 years. In that time, Mediestates has become the largest specialist broker of UK dental practices, Medicruit has grown into the largest UK dental recruitment agency and specialist financial advisers Medifinancial offer service and support to the whole dental profession.

We have always taken great pride in being a family group of businesses, focusing on our clients’ specific needs and providing a bespoke service to those looking to buy or sell a dental practice, whilst also helping them to recruit the best staff to ensure their business is a success. We have always sought ways to enhance our businesses and the services we provide, and we were delighted in April 2017 to announce that Mediholdings was to become part of an even bigger family, when we joined Henry Schein, one of the world’s largest distributors of healthcare products, services and supplies.

Being a Henry Schein company brings with it all the benefits of belonging to a global organisation, adding to the professional and personal service we already provide to our clients. Being part of Henry Schein means we are now better placed than ever to understand the challenges of the dental profession and offer industryleading services through the combined offerings of Henry Schein Dental and Software of Excellence, also a Henry Schein company.

A clear vision


It is vital when selling a dental practice to be aware of all the options, allowing the sale to be planned with confidence. The more knowledge a practice owner has, the more successful the selling process is likely to be, and ensuring the practice is in the best shape possible means it is more likely to reach its maximum value. Measuring data creates a factual picture of a business – this is important in providing practice owners with the information they require to have a clear vision of how well they are doing now and importantly, the potential for growth in the future.

There is often a noticeable difference between how a practice owner thinks their practice is performing and reality. Through our association with Henry Schein Dental and Software of Excellence we can now offer our clients innovative ways to understand more about how their business is performing and through this, build more value into their business before the time comes to sell.

Software of Excellence offers a complimentary ‘practice health check’ to all dental practices across the UK and Ireland, regardless of their current practice management software. Within an hour, SOE’s best practice consultants can analyse data within the practice’s existing software and gain insight into the strengths within the business and identify any area for improvement. With research from over 1,800 practices across multiple systems that have already completed their health check we are able to provide a performance benchmark against the UK’s top-performing practices, to give an understanding of what’s possible and provide ideas and advice on how to implement the processes needed to achieve similar results.

Benefitting the business


Similarly, Henry Schein Dental’s practice analysis uses as its starting point, the professional and personal goals of the practice owner and then illustrates how value can be generated in the practice by establishing the priorities that will help that practice realise its full potential. A practice analysis can uncover the positive financial impact of improved recall processes, fee analysis, hygiene revisions and other actions that can benefit the business overall.

Becoming a part of the Henry Schein family has given the Medi group of companies access to one of the largest networks of consultants and business experts in dentistry. Henry Schein has touch-points in almost every dental practice in the UK and the fact that Mediestates, Medicruit and Medifinancial are now a part of this network can only add to our overall market knowledge. Having been a part of Henry Schein for just about 12 months now I can say the business truly has its finger on the pulse and if it’s happening in dentistry, then we know all about it.

This unrivalled presence and access to an increased buyer’s market, combined with the wealth of experience of Medi’s team of directors, makes us positioned to help practices in whatever area they need, be that buying or selling a practice, specialist financial advice or staff recruitment. A great partnership which remains entirely focused on our clients’ needs.
PRACTICE ONE
Practice Location - this practice benefits from a busy high street location within a north London borough and has been established since the 1940s. The current partnership of two principal dentists purchased the business as a going concern over 30 years ago.

Type of Practice - this is a four surgery, predominantly NHS practice, with the lion’s share of income generated by the two principal dentists. The practice is located within a three-storey, end terraced property, with expansion space available to create a fifth surgery. The freehold premises were owned by one of the partners and were offered to an incoming buyer on a leasehold basis.

Financials - total turnover is in excess of £870,000 with 92% of income derived through an NHS contract and 8% from fee per item treatments. The NHS contract is for provision of c.24,000 UDAs which produces a significantly higher than average UDA rate of £33.50. Further promotion of the private treatments available at the practice presents an incoming buyer with the opportunity to grow turnover and subsequently increase profit margins.

Buyer Appetites - this practice was marketed exclusively to our premier tier buyers and was hugely popular with a full day of viewings being completed by the principal dentists and a representative from Mediestates. Multiple offers for the business were placed within 48 hours of this viewing day with the successful bid negotiated significantly in excess of the asking price.

Reason for sale/Incoming purchaser - both principal dentists were commencing their exit strategy and consequently they were happy to remain working at the practice post sale. This suited the incoming investment purchaser who was pleased to retain and benefit from their expertise going forward.

Price Achieved - the location of this practice and extremely desirable NHS contract resulted in a final selling price of £2,200,000, which equates to 252% of turnover. The selling price was inclusive of goodwill, equipment, fixtures and fittings.
PRACTICE TWO
Practice Location - established over 40 years ago, this practice is located within a small town in Hampshire and benefits from easy access to nearby town and cities. The practice is excellently positioned on the edge of the town centre shopping area resulting in good patient access and close proximity to numerous shops and amenities.

Type of Practice - this traditional NHS practice has two surgeries and huge scope for growth potential through further maximisation of private treatments. The detached premises were owned by the outgoing principal and were offered alongside the practice on either a freehold or leasehold basis. As well as the ground floor practice, the freehold includes a residential flat above which generates further income through a rental agreement.

Financials - income at the practice is made up of a £338,000 NHS contract with an additional £32,000 private treatment fees. The practice is efficiently run and the UDA rate of £28.00 contributes to a healthy net adjusted profit of c.£155,000. The practice was regularly referring specialist treatments out, which presents a great opportunity for a new owner to increase turnover by providing these treatments in-house.

Buyer Appetites - we marketed this practice solely to our priority buyers which resulted in multiple viewings being completed. All of the viewers subsequently placed offers for the practice with the eventual offer accepted being over and above the initial marketing price.

Reason for sale - the vendor was looking to retire, however was happy to continue working at the practice for a handover period of three to six months. The purchaser already owned one practice and acquired this practice as part of a strategic plan to establish a small group of practices.

Price Achieved - the price achieved was £670,000 inclusive of goodwill, equipment, fixtures and fittings, which represented a sale value of 181% to turnover. A lease agreement was put in place between the vendor and the purchaser for an annual rental of £13,700.
PRACTICE THREE
Practice Location - this practice was set up from squat 12 years ago by the current principal and is located on a busy high street in a large Buckinghamshire village. The practice benefits from excellent transport links being situated close to the M25 and within 25 minutes commute of central London. There is a large public carpark immediately adjacent to the practice.

Type of Practice - this is a busy, four surgery mixed practice with four associates and six hygienists working alongside the principal to deliver income. The premises are available on a leasehold basis and comprise the ground floor of a commercial premises, with other businesses located on the first floor. The practice is fully computerised using SOE Exact.

Financials - annual turnover of £812,000 is derived through an attractive NHS contract in excess of £500,000 for provision of 20,000 UDAs. The remaining income is generated through general dentistry and hygiene treatments provided to private fee per item patients. The practice has vast potential to increase the turnover and profitability by increasing marketing activity, extending opening hours and introducing specialist treatments.

Buyer Appetites - we successfully marketed the practice to our priority buyers, with multiple viewings arranged. The healthy NHS contract helped drive buyer demand and resulted in offers being received well in excess of the original marketing price.

Reason for sale/Incoming purchaser - the practice came to market as a retirement sale, however the vendor was happy to work on at the practice post-completion for a short period. The incoming purchaser already owned a practice within the locality and was looking to build on their existing portfolio.

Price Achieved - £1,500,000 inclusive of goodwill, equipment, fixtures and fittings. The sale was agreed on a leasehold basis with an annual rental of £30,000 over a 15-year term. The achieved selling price equates to 185% of turnover.
Posted by: Anne Barker on 15 Mar 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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