LEGAL EXPERTISE
The Covid-19 pandemic has fueled an unprecedented level of dental practice transitions activity. If you are looking to sell your practice, here are a few tips to help you prepare.
1. Engage experienced advisors
Assemble a team of experienced dental advisors to guide you through the sales process. At a minimum, retain an accountant and an attorney familiar with practice transitions. These advisors will counsel you on common deal points, deal structure and tax implications, and other relevant considerations.
2. Start planning early
Ideally, you should start the transition planning process with your advisors two to five years before you intend to sell to have the time necessary to make the practice an appealing acquisition target.
3. Select a buyer type
There are four types of dental buyers: existing partner; associate dentist; private, unaffiliated buyer; and Dental Services Organization (DSO). There are pros and cons associated with each buyer type. Discuss your goals and motivations with your advisors to enable them to help you select the right buyer type.
4. Adequately staff and outfit the practice
One
advantage of starting your planning efforts early is that you can take
the time needed to adequately staff and outfit the office. Buyers will
analyze staffing levels to ensure that the office is staffed to enable
growth and productivity. Similarly, a clean and updated office will
obviously be more attractive than an outdated one.
5. Be mindful of deal structure
Once
you list your practice and start soliciting offers, ask your advisors
to carefully evaluate the transaction structure proposed by each offer
based on your goals and objectives.
Do
not simply accept the offer that contains the highest multiple of
EBITDA; analyze the structure of each offer and its risks and benefits
(e.g., taxes, short-term vs. longterm gain, etc.).
These
are only a few of the many considerations you should address when
planning to sell your dental practice. Find your team of advisors,
outline your priorities and get planning.
Jason D. Gregoire is Shareholder and Healthcare Group Chair at Sheehan Phinney and can be reached at (603) 627-8154 or jgregoire@sheehan.com.
Jason D. Gregoire
75 Portsmouth Boulevard, Suite 110 Portsmouth, NH (603) 431-1222 www.sheehan.com
