Buying and selling a dental practice - The Basics
With nearly 150 successful dental acquisitions and disposals under our belt, the Acuity healthcare team has a wealth of experience in buying and selling dental practices and has what it takes to get your deal over the line with the minimum of fuss. So whether you're looking to add to your existing portfolio, deciding whether to take the plunge and step out into business by yourself or hoping to realise the value of your business after years of hard work, we've got all bases covered and are here to help you.
We have compiled this useful guide to highlight some of the key issues you'll need to address in order to make the sale or purchase of your dental practice a success. Getting a team of trusted advisers on board at the outset of the process is essential when it comes to your negotiating position and ensuring you achieve the best deal possible whether you are buying or selling. If you require any further information, one of our healthcare team would be pleased to talk through your requirements and answer any of your questions.
Buying a dental practice
Whether you're a first-time or novice buyer or an established dental provider who is a seasoned acquirer, buying a dental practice is a big deal and you will not have taken the decision to do so lightly. Acuity’s healthcare team is here to make the process as painless and efficient as possible and assist you post-acquisition with the integration and practicalities of running a new business.
We have built up a wealth of experience over fifteen years and have the specialist skills and experience needed to effectively advise you on the following key areas:-
- Finance: we can assist and advise you on the terms of any finance and security package you may be taking on to fund your acquisition(s);
- Due diligence: we can produce a tailored due diligence questionnaire to help uncover all the relevant information about the practice you are looking to buy. This will enable you to go into the deal with your eyes open and will allow us to effectively negotiate the terms on which you will buy the dental practice;
- Sale agreement: we will advise you on the terms of the sale documentation, ensuring that you are protected as far as possible should anything go wrong with the business after you have bought it and that there is a smooth transition from seller to buyer;
- Property: we can advise you on the terms on which your dental practice will operate from its premises, including the preparation and negotiation of a lease or property transfer and procuring the necessary consents;
- Associates: we can advise you on the terms on which you engage the sellers as associates going forward in order to ensure there is long-term continuity in the business you are acquiring, looking at, amongst other things, restrictive covenants to fully protect your new business and fee retentions to deal with any failed or defective treatment performed by the associate;
- Employment: we will advise you on the terms of employment of those engaged in the practice and (if necessary) on the transfer of employees to your business. This will enable you to understand and assess your obligations and financial commitment post-sale;
- Regulatory: in addition to the commercial considerations, there's some red tape to deal with as well, something which you'll no doubt be familiar with! Once you have completed the purchase of your dental practice we'll be able to guide you through the process of transferring any GDS and/or PDS contracts as well as the CQC registration and de-registration process; and
- Post-transaction assistance: if you are going into partnership, we'll be able to produce an expense sharing agreement which can be put into place on day one, ensuring a smooth start to your new business relationship. Alternatively, if you are a corporate dental acquirer, we will liaise with your integration team to assist them with the smooth transition of the dental practice into your portfolio.
Selling a dental practice
If you've already been through the process of buying a dental practice, or have grown your practice as far as you are able to and are now ready to realise the fruits of your labour, then now is the time to get in touch.
Whilst this is an exciting time for you, there is a fair bit of work to be done before you can walk off into the sunset or take more of a back-seat role in the business. Any potential buyer will want to know as much as possible about what they are buying and you will want to get your house in order early so you can present information to them in a sensible and accessible form. You will also want to identify any potential gaps in information (e.g. lack of formal written contracts) or anything which might cause a delay or cause issues for your buyer at the outset of the process.
This is where our specialist dental team can help you, advising you on the following key areas of your deal:-
- Finance: we can assist and advise you on the cancellation or discharge of any loans and security that may be in place over your business before it is sold;
- Due diligence and disclosure: when you receive enquiries from a buyer, we can assist you with providing responses to these, pulling together the relevant documents and providing these for review by the buyer in our electronic data room. We will also talk you through the process of disclosure (i.e. putting the buyer on notice of certain aspects of the business so that they have a complete picture of what liabilities they are taking on);
- Sale agreement: we will be able to advise you on the terms of the sale agreement to ensure that your liabilities post-completion are reasonable and as limited in scope as possible. Key areas to consider include the detail and scope of the warranties you'll be providing to the buyer, your financial and administrative obligations post-transaction and the extent of any specific liabilities which you will remain responsible for following completion;
- Property: we will assist you with every aspect of the transfer of the property from which your practice is run, including dealing with third party landlords where the property is leasehold;
- Regulatory: there are also regulatory issues to consider on the sale of a practice including the establishment of a partnership route with NHS England, the transfer of any private capitation schemes into the name of the buyer, the transfer of any GDS and/or PDS contracts and the CQC registration and de-registration process; and
- Post-transaction assistance: if you aren't yet ready to retire and wish to continue to work in the practice then we'll be able to advise you on the terms of your associates agreement and any post-termination restrictions.
Jon Lawley is an associate in the Corporate & Commercial team