Going, going, gone!
With demand for dental practices high, Dean Barker thinks there’s never been a better time to sell
Practice owners with a turnover of more than £700,000 are often delighted when I tell them that demand for their type of practice is at an all-time high and they could achieve within 2% of the asking price – often higher – in less than six months.
They are then even more delighted when I tell them they might not even be charged any commission on the sale.
Mediestates attracts buyers from across the UK and Europe. The buyers registered on our books include corporates and private-equity-backed companies of all kinds who, charged with ambitious acquisition targets and in a financial position to close a quick deal, are actively seeking practices with a turnover of more than £700,000. These buyers join our ‘premier tier buyers’ scheme, which gives them a period of exclusive access to these sought-after practices when they come to market. This enables them to act quickly and negotiate a deal with the seller.
Selling to these buyers can be very quick, as most already have everything in place; often have funding already approved, have specialist solicitors ready to leap into action and know the process inside out. A sale to a premier tier buyer typically takes about four months, rather than the average eight or nine months, to be finalised.
Buyers to suit every practice
Practices with a high turnover are viewed as a good investment by our premier tier buyers, especially if they are associate-led and can, therefore, run autonomously with relatively little input post-acquisition.
Furthermore, they are willing to accommodate a variety of different owner exit plans. Those who wish to sell and leave the practice straightaway will be able to find a buyer as long as it is an associate-led practice and the goodwill isn’t tied up with the principal themselves. Other owners might wish to sell, but stay on in the practice for several years; perhaps remaining clinically involved, but free from the responsibilities of running a practice.
There are buyers out there who will be open to both options: some will even offer the opportunity for owners to become clinical lead across a number of practices, or specialise in an area of interest within the new practice group.
Making the call
When the time comes to sell, practice owners should consider the reach of their brokers carefully. It pays to ensure that buyers know they will have fast access to their target practices when they become available.
Consider too the experience on offer: look for a team that can recognise which buyers will fit certain practices, and that is positioned to help vendors through every step of the process. With experts on both sides, the sale process has the best chance of progressing smoothly and swiftly.
If in doubt, ask about a broker’s track record – when it comes to marketing eligible practices to our premier tier buyers; for example, we consistently get within 2% of the valuation (and often higher). And when the sale goes through with them, we don’t charge our sellers a fee at all.
When opportunity knocks…
There is a world of opportunity awaiting owners of dental practices with high turnover in the current market conditions – even for those who have not been contemplating selling, who perhaps are a while away from retirement and plan to continue as owner for several years yet.
There is an alternative, which is enabling them to achieve a competitive price for their practice and, therefore, a financially secure future.
But it’s more than that. Selling a practice can release principals early from the responsibilities and duties of ownership, and give them the opportunity to take a different path – perhaps pursuing a new specialism, concentrating on the clinical side or even doing something entirely different.
For many, getting back to their roots and no longer needing to worry about UDA targets, compliance, satisfying the CQC, NHS contract reforms and even Brexit is extremely attractive.
It’s good news that, despite all the current uncertainty in dentistry, the demand for high-turnover practices remains extremely fierce. However, it is by no means certain how long this demand will last, so now might be the time for practice owners to maximise the sale potential of their business, reap the rewards and see what other opportunities are out there.