“I first met Dental Elite at BDIA where they were presenting a lecture on practice sales and acquisitions,” reflects Dr Ninan Vettasseri. “Impressed with their experience and knowledge of the market, I decided to give them a call. And I’m glad I did, because not only was Katrina very supportive, but whenever there were hiccups she came up with a solution straightaway.

“If I could go back and do it again, however, I would do two things: Do my homework before putting the practice on the market and spend more time on marketing – the latter of which would have generated a higher completion price if I’d dedicated more time to maximising my practice’s potential.

“My advice to vendors would therefore be to plan well in advance and learn as much as you can about the process – not to mention to keep on track with UDA targets!”

For help planning your exit strategy in advance or selling your practice, get in touch with Dental Elite.

For more information on Dental Elite visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

When Jamal Johnston sold his practice, he utilised the services of Dental Elite.

“I am very happy with the outcome of the transaction,” he commented when asked about the process, “and though it took slightly longer than expected, it still only took nine months.

“During the sale my representative was Leah Turner, who was very proactive and worked closely with me throughout the process.”

When asked about the challenges that he faced, he said:

“Without a doubt the most challenging part of the sale was due diligence. Had everything gone smoothly the deal could have been completed far sooner than it did, but because there were a few hiccups, the process was dragged out longer than it needed to be.

“My advice would therefore be to make all the necessary preparations and to start collecting and organising the documentation required for the due diligence aspect of the sale, even before you consider putting it on the market.”

There are a great many facets to selling a dental practice, so to ensure that you’ve got everything covered, make sure you utilise the services of a reputable practice sales and valuations agency like Dental Elite.

For more information contact Dental Elite. Visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

Benjamin Franklin, writer and scientist once said, “By failing to prepare, you are preparing to fail”. This philosophy can be applied to many situations, including that of selling a dental practice. Whether you are looking to reduce the burdens you shoulder, or are ready to move on to something new, preparation time put in before the sale can make the transaction much quicker and smoother.

There are many benefits to owning and managing a dental practice, but sometimes the administrative tasks and regulatory compliance can mean dentists lose focus of the reason they entered the profession in the first place –to care for patients. As with any sale, be it a car, house or dental practice, preparation is crucial. Time spent on refining and enhancing the practice will ensure it is sold at its highest possible value, to the right buyer.

The area which can slow down the process is the gathering together of all the necessary paperwork. Time spent ahead of the sale can help quicken this up and make it a lot less stressful towards the end. The main items that need to be made available include:

• Contracts, including staff, equipment suppliers, software suppliers etc.
• Financial accounts
• Policies and procedures, including health and safety, infection control etc.
• Building certificates
• Care Quality Commission (CQC) documents
• Price lists

Finally, in the preparation stage, do not forget your dental team! It can be a stressful time for all, timing needs to be considered carefully; they should not be told too soon in case the situation changes and staff become demotivated or consider moving on, but equally, you want to leave enough time so as to reassure them that their jobs and their patients will be looked after.

Selling to a dental corporate can often help an independent practice achieve its full potential. Their marketing budgets are larger and therefore they have the ability to reach a wider target audience, but they remain mindful of the existing practice’s ethos and patients. There is also a huge clinical and administrative support system for staff to utilise, with various learning and CPD opportunities readily available that are often subsidised. For example, Rodericks Dental is renowned for its commitment to patient care and treatment, plus, it prioritises staff development and career progression and has a dedicated, experienced team to help you through the transition.

If you wish to take the next step and are looking to sell your practice, make sure you know all your options and have all the information you need to leave your patients and staff in the safest hands.

For more information, please visit www.sellyourdentalpractice.net, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01604 602491.

“Whilst at a seminar on ‘selling your practice’, I met Luke Moore, a representative of Dental Elite” says Dr John Campbell who has recently sold two of his practices. 

“The valuation was organised promptly, we had a fantastic response and we received the full asking price.

“Despite the fact that a deferred consideration was involved pursuant upon contract extensions, Luke’s confident and professional approach eased the process; to date the deferred considerations have been met with no issues.”

Naturally, when it came to selling his second practice, Dr Campbell felt that there was really only “one choice of broker.”

“Full asking price was once again achieved and this time without a deferred consideration, despite only one year remaining of the contract!” John adds. “I think that this is testament to Dental Elite’s accurate understanding of the dental market.

“I would whole heartedly endorse Luke and Dental Elite for their thoroughly professional and supportive approach to selling a dental practice. Selling can be a very stressful event but Dental Elite certainly eased the process! I would without hesitation, recommend Luke and his company to any colleague, and indeed have already done so.”

For more information and to find out how Dental Elite can value
and assist your practice sale visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

Looking to buy a dental practice? Don't forget to consider the effect intangible values such as customer base, rapport and employee relations will have on the goodwill premiums that might be incurred.

As the market becomes increasingly more aggressive and competitive with practices in high demand, goodwill premiums are growing in occurrence and increasing in magnitude. This will affect the amount that you will have to pay on top of the valuation price.

With over 100 combined years’ of experience and expertise, the team at Dental Elite are committed to providing financial advice to those looking for a smooth and hassle-free acquisition.

Knowledgeable and attuned to current trends, Dental Elite offers a person-centred single point of contact service to ensure you don't go over budget and get out of your depth.

Don't get caught out with goodwill premiums; contact Dental Elite today.

For more information contact Dental Elite. Visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

We all have the dream of owning our own practice, however the thought of making that transition is often frightening.
 

My first thought was, what can I afford? The only loan I’d ever got was for my home, and that was in the days banks were handing out money to anyone and everyone. This is where Dental Elite (DE) Finance, and in particular Becki, were invaluable. Long before I found the right practice, Becki had taken all the relevant information from me and let me know what I could realistically expect to get from the banks given my circumstances. This really narrowed down my search criteria, allowing me to stop wasting time on those practices that were out of my reach.

This was to be my first acquisition, for a reasonably sized practice in South Yorkshire with a healthy NHS contract. Before committing, DE Finance ran through all the figures again, ensuring the purchase was financially viable, before we moved forward.

In between dealing with the sellers and our respective solicitors, as well as having to turn up to work each day, I didn’t have time for much else. In DE Finance I felt like I had a PA, with Becki contacting all the major banks (and some I’d never heard of) on my behalf, leaving me to get on with other things. I left Becki to fight my corner as to why they should lend someone who has never run a business, let alone a dental practice, such a large sum of money. This I thought was going to be the most stressful part of the purchase, but it turned out to be the easiest.

Becki had influential contacts in all the right places, and offers from the banks quickly came rolling in. More importantly, because Becki was involved, the banks knew they would be competing against each other, and subsequently provided offers at fantastic rates. I certainly didn’t have time to approach all these banks myself, nor would I have received the rates I did.

Things didn’t end here however. Becki followed the process right through to completion and beyond. She was always there when I needed to contact her, even out of work hours. When the bank was labouring with the sale at times, she would intervene on my behalf and get her contact to push things along. It was great just being able to pick up the phone when I wasn’t sure about something, to receive some expert guidance, or even just some much needed reassurance.

Would I recommend Becki? Absolutely, without hesitation. I know who the first person I ring will be when I’m ready to make my next acquisition, even if it’s not a dental practice. And what did this fantastic service cost me? Nothing, not a penny!

Thank you Becki for making this whole process so easy for me.

- Imran Ahmed

The dental practice goodwill values for the last financial year ending March 2015 are out at last, and average practice sales with Dental Elite as a broker have risen to 3.23x adjusted net profit, 6.99x adjusted EBITDA with 137.8% as a reflection of turnover.

“I think anyone involved in dental practice sales and goodwill values will have noticed that the market has gained considerable strength,” reflects Luke Moore, Co-Founder of Dental Elite. “Most practices this year have achieved over and above our valuation.”

This year, NHS practices are displaying a 3.66x ANP, 6.79x EBITDA and 156.70% turnover compared to mixed practices, which sold for an average of 8.98x adjusted EBITDA or 3.56x ANP with a reflection of turnover standing at 136.02%.

“The breakdowns are very interesting,” says Paul Wilkinson, Co-Founder of Dental Elite. “It would seem that mixed practices tend to sell more to dentists who seek to work in the practice themselves, hence the slightly higher EBITDA multiple which is counteracted by the lower Adjusted Net Profit. It is also interesting to see Private Practice Multiples starting to narrow the gap between NHS Practices.”

To find out how you can get the best deal on your practice, and for a free, no strings valuation, contact Dental Elite now.

For more information contact Dental Elite. Visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

“I was very happy with the service I received from Dental Elite,” says a Principal from Sussex who has recently sold their practice. “My representative was very supportive and I found it extremely valuable to be able to deal with the same person throughout the whole process.

“I thought the valuation process went very well and I was pleasantly surprised at just how flexibly the figures could be analysed.

“I would highly recommend Dental Elite to other professionals – in fact I’m singing their praises to all of my colleagues.”

Dental Elite prides itself on being able to offer dental professionals honest and pragmatic advice when it comes to selling their practice. With a wealth of hands-on experience and a dedication to seeing a job well done, the friendly team at Dental Elite are always ready to help.

To find out just what they can do for you, contact them today.

For more information and to find out how Dental Elite can value
and assist your practice sale visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

In one of the largest transactions of the year to date, specialist dental adviser Christie + Co has sold six dental practices based in the East Midlands operating as Jordan Dental.

Jordan Dental is a progressive and well run group of predominantly NHS practices in excellent locations in Nottingham, Derby and Mansfield. The portfolio has been sold to {my}dentist, the largest corporate operator in the UK. The price was undisclosed.

Acting for the Jordan family, Christie + Co undertook a confidential marketing process from which {my}dentist was chosen as the preferred bidder. Clare Emery, Senior Associate at specialist solicitors Harrison Clark Rickerbys acted for the vendors.

Simon Hughes, Director and Head of Medical at Christie + Co comments: “I am delighted that Christie + Co was chosen to act for Dave Jordan in the sale of his business. He took advantage of strong market conditions and we were able to agree and conclude terms much more quickly than can often be the case with NHS practice sales. We wish {my}dentist the very best with their acquisition which gives them a significant and quality presence in the Nottingham dental sector.”

Dave Jordan of Jordan Dental comments: "It was a pleasure working with Christie & Co, the team showed great understanding of our needs and guided us through the difficult decision to sell something that we had worked so hard to build from scratch. I wish the team at {my}dentist every success in the future and trust that the group will continue to flourish as part of a much bigger operation."

Robert Pilling, Director of Acquisitions at {my}dentist adds: “I am delighted with the acquisition of the Jordan Dental Group and look forward to working with the practice teams over the coming months and year ahead. I would also like to extend my thanks to the Jordan family on choosing to sell to {my}dentist and also to the Christie + Co team who supported the acquisition process in a very professional manner.”

When Peter Instone and his colleagues were ready to sell their practice, they chose to work with Dental Elite. “We were happy with them in every way,” he says. “They were excellent; we had no problems.

“Being able to talk to the same person throughout the process was useful – they knew everything that was going on from start to finish. Any questions we raised, they were able to get back to us with answers.

“I would certainly recommend Dental Elite to others.”

With a team that is proud to have over a hundred years’ experience in the dental sector, Dental Elite is in the perfect position to assist professionals through the sale of their practice. They have a reputation for offering practical and pragmatic advice and approach each case with honesty and openness.

If you are looking to sell your dental practice and want guidance from the experts, look no further than Dental Elite – contact the team today!

For more information and to find out how Dental Elite can value
and assist your practice sale visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

The expert team at Christie + Co has one simple aim: to use its extensive market experience to get the best results for your business.

At the BDIA Dental Showcase 2015, Christie + Co will be on stand H130, ready to show you the range of advice and information the specialist dental team can offer.

A wide range of services are offered by the team, including buying and selling a practice, finance and insurance. Chartered surveyors will also be on the stand to advise on property related matters or formal Bank valuations should you require one.

Regulated by RICS, the team of experts will be sure to tailor their expertise to your individual circumstances and make sure you get precisely the result you need. By combining local knowledge with national insight, their understanding of the dental market is second to none.

If you are looking for market-leading, innovative advice, come and visit Christie + Co at this year’s BDIA Showcase.

To discuss how Christie + Co might help you achieve your future plans please call today on 0207227070

The dental practice sales market is experiencing one of its busiest ever periods, with growing demand for all types and size of practice. Christie + Co can help you make the most of this favourable environment.
 

Having built up a vast wealth of knowledge and experience of the dental sector, Christie + Co is perfectly suited to advise you through all aspects of practice acquisition or sale.

From guidance on preparing your practice prior to valuation, to securing funding for a practice purchase, Christie + Co have all the answers you need and can help you to achieve your long term goals.

If you are looking to buy or sell a dental practice, turn to the experts at Christie + Co. The straightforward and friendly team will carefully guide you through the entire process.

To discuss how Christie + Co might help you achieve your future plans please contact Simon Hughes on 020 7227 0749

When Chris Hobley decided to sell his dental practice in Northamptonshire, he was lucky enough to have the practice valuers and finance experts at Dental Elite close by.

“I was selling because of personal health issues,” explains Chris. “Dental Elite were conveniently located for me, so I chose to work with them. Throughout the process our consultant, Alison, provided excellent and personalised sales care.

“She actually valued the practice at almost double the yield of some competitors – and we achieved Alison’s valuation!

“I think one of the biggest challenges I faced was the level of administration that was necessary for the CQC Application and the NHS paperwork but, overall, the sale took about 10 months to complete.

“My advice to professionals in the same situation would be to sell to a buyer that you like and who would be most suitable for your patients.

“I would also recommend Dental Elite; their attention throughout the sale and follow up was excellent.”

For more information and to find out how Dental Elite can value
and assist your practice sale visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

If you thinking of selling your dental practice, you need not look any further than Dental Elite.

“Dental Elite was recommended to me,” says Paul Robinson who recently sold his practice to a corporate company. “And I was pleased with the service they offered. The representative that worked with me was very good, very approachable and highly knowledgeable.

“The sale only took nine months and, while there was much work to do, Dental Elite managed it all efficiently.

“I would recommend their services to other practitioners who are ready to sell.”

As the second largest specialist practice sales agency in the country, Dental Elite is in the perfect position to help you when the time comes to sale your practice. By offering practical and honest advice, they can ensure the entire procedure goes smoothly, from the initial business valuation to the transition process.

If you are seeking professional guidance, don’t delay in getting in contact with the friendly, efficient team at Dental Elite.

For more information and to find out how Dental Elite can value
and assist your practice sale visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

Written by Luke Moore of Dental Elite

Dental practice valuations are often shrouded in mystery but they needn’t be; here we give you an insight into the process behind the numbers.

It’s true that since the introduction of business-focused stakeholders into the dental profession, as well as a more concerned credit team in lending banks; the computations behind goodwill valuations require more logic.

Demand for dental practices prior to the 2006 NHS contract and the relaxation of the Dentists Act 1985 was far more limited than in the present market. The NHS contract change installed a scarcity value in NHS contracts, restricting competition significantly. With one of the main concerns business owners previously had removed, practice values doubled if not tripled by August 2007.

Valuing a dental business is now much more of a thought-provoking process and solely using percentages of turnover as a method of calculation is no longer satisfactory.

Alternatively, EBITDA modelling can be used to provide the true operating profit of a dental practice, however, multiplication of a practice’s existing EBITDA does not serve as an accurate calculation of practice valuation either.

EBITDA or Earnings Before Interest, Tax, Depreciation and Amortisation, is an accounting acronym that does exactly as it says. The process of calculation involves removing all of the non-cash costs in your accounts such as depreciation and anything that a new practice owner would not continue to incur. Once the EBITDA figure has been established, this is then multiplied depending on the company, market and economic climate.

Currently, dental practices are being sold for between four and seven times their EBITDA. This can vary depending on a number of factors, however, generally the lower the perceived risk and the more sustainable the profit is (or is perceived to be) the higher the profit multiplier.

Unfortunately calculating this is not as simple as one might think and many practices are far less clear-cut. Practice A and B are radical examples, but even a small difference of £20,000 in projected EBITDA terms can be the equivalent of £140,000 in value.

It is also important to remember that your profit and loss EBITDA calculation will not be the same as the buyer’s EBITDA. This is because EBITDA and multiples rely on each other to make the valuation work, for example, five times profit and loss EBITDA might not be as attractive as a purchaser’s adjusted net income at four times. Furthermore, the EBITDA used may not always be your actual EBITDA. When analysing the valuation, it could be that the amount of money you spend on associates, materials, labs, staff and other areas is higher than what other buyers would spend. Therefore the higher valuation may come from a lower valuation multiple, multiplied by a higher projected EBITDA.

Calculating the valuation of your dental practice is not a simple procedure and a number of variables need to be taken into account. Working with trusted experts, such as Dental Elite, who can offer you the necessary advice and support is crucial.

Dental Elite is the second largest specialist practice sales agency in the country, offering a comprehensive and transparent service. The experienced and knowledgeable team can provide you with a free and non-committal valuation. Following a visit to your dental practice they will provide you with a Healthcheck Report, which demonstrates exactly how they have calculated your practice’s value and how it could be improved.

Although dental practice valuations remain as much a work of art as they are a science, understanding the process will reduce the mystery surrounding the calculations. By working with professionals who are experienced and current in dental practice valuations an accurate and transparent valuation will be achieved.

For more information and to find out how Dental Elite can help you, visit www.dentalelite.co.uk, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01788 545 900

Location, location, location?

Martyn Bradshaw explains why location is important but not everything when it comes to practice values

Our national press love a headline quoting a statistic on the average house price or the average wage. Statistics containing an ‘average’ often make a good story because they divide opinion. However, some should be treated with caution.

Practice values are often subject to similar treatment and while surveys might contain some useful guidelines on the general state of the market, they often fail to uncover the finer points of valuing the goodwill of your dental practice.

There is no doubt that there is a significant variance in the values of practices in the south east of England, the major English cities and more remote locations. The same can be said of Scotland, with practices commanding higher prices if they are in or close to Glasgow, Edinburgh or Aberdeen.

Price hotspots

Hotspots by location tend to be town centres/highly populated areas. This is simply because these areas enjoy a higher concentration of dentists seeking to buy a practice. In these locations the majority of sales are likely to be to dentists wanting to be ‘owner occupiers’ as they are the largest group of interested buyers. Typically these hotspots are (but not restricted to):

• Within the M25, Birmingham and other Midlands cities, Manchester and the north west cities, Bristol, Newcastle and cities in west and south Yorkshire.
• Likewise, the major Scottish cities of Glasgow, Edinburgh and Aberdeen will command higher prices than the less populated areas of Scotland. Interestingly, Scottish practices often enjoy interest from buyers across the UK, largely due to the (non-contract based) nature of NHS income.

When hotspots are less important

Body corporates are as active as ever and are seeking to purchase across the country. Do they pay different values dependent on the areas? Not generally. Their assessment of goodwill value relies on the ‘super profit’ that the practice generates (a multiple of the earnings before interest, tax, depreciation and amortisation – known as EBITDA). This calculates a value, regardless of where the practice is.

It would be wrong to say that location doesn’t influence the price a corporate will pay for your practice. Location becomes important if a corporate has a foothold in a particular area. Running a group of practices in proximity will bring economies of scale, which is a key mantra to the investors behind corporate dentistry. Therefore, the location factor on price in this case is more regional than national.

What impacts on price other than location?

Obviously, the location of a practice isn’t something practice owners can change so if yours is not in a price hotspot, what can you do to increase its value? Most patients will come from the locality – which can sometimes be quite a small area depending on the transport infrastructure and other factors. There are exceptions, but few general dentistry practices find it possible, despite good marketing campaigns, to broaden the area from which patients attend. Offering specialised services (cosmetic dentistry being an obvious one) can, however, be effective in drawing patients from further afield.

The biggest single factor affecting values is probably the basis of the treatment provided. Some practices sell for significantly over the asking price due to the high volume of offers at the closing date for sealed bids. These tend to be NHS practices. The banks see strength in an NHS income stream and will lend readily as such, hence the high number of finance-ready buyers available. An NHS practice in a northern city or even a more remote location is very likely to command a higher price than a private practice in the south east.

While private practice values may be enjoying a value resurgence due to the improving economy, buyers are more likely to pay 'top dollar' for those practices where capitation scheme income is greater than Fee Per Item income. Again, banks are more comfortable lending on this proposition as they perceive the income stream to be more secure.

Turnover is vanity, profit is what matters

To understand how we might break a value assessment down even further, let’s consider two similarly-equipped NHS practices with the same turnover, in the same city, in the same street. One has a consistently higher level of profit than the other due to lower staffing costs or better cost control. I know which would command the higher price.

Martyn Bradshaw is a practice valuer and sales agent with PFM Dental. For further information on PFM Dental visit pfmdental.co.uk

PFM Dental and Patient Plan Direct, proud sponsors of GDPUK, have come together to create a new blog area on GDPUK: Professional Services for Dentists

The area will provide expert opinion and advice in key areas relating to professional services within dentistry including:  Practice valuations, Business management and operations, Financial, Accountancy and Legal. Guest bloggers are experts in their field with one thing in common – they all work exclusively with dentists. The blog represents an excellent all-you-need-to-know source to keep you ahead of the field in non-clinical matters.

PFM Dental are one of the leading specialists providers to dentists within the UK providing: a dental sales agency, practice valuations, independent financial advice and chartered accountancy services.

Patient Plan Direct is the fastest growing, most cost effective and flexible plan provider in the market - Experts in plan launches and plan transfers.