Buying & Selling a Dental Practice
Every dental transaction requires both a buyer and a seller. We have been providing support and advice to both parties based on our experience of the dental sector over the last 40 years.
Selling your practice is not an everyday occurrence and requires a lot of planning and collating of information which will be required by the purchaser. Once instructed the first step is to prepare a draft valuation of your practice and determine the basis of the required transaction.
If your practice is Incorporated then consideration has to be given as to whether to sell the assets of the business or the shares in the limited company. This is an important issue as far as tax is concerned and requires due consideration. Once the valuation is prepared and the basis of the disposal agreed, we will then go to market as to prospective purchasers.
Negotiation with a potential buyer, and their advisers, would the lead to agreeing Heads of Terms which would confirm the essential contractual details.
Once the Heads are agreed we would then set to in respect of financial due diligence, dialogue with your solicitors and input to the Sale and Purchase Agreement which will be upon Completion of the contract between the 2 parties. As tax advisers we would calculate as far as legitimate mitigation of all tax liabilities including Capital Gains Tax (CGT) Corporation Tax (CT) and income Tax (IT) liabilities which would arise from the disposal.
Throughout the process, which will be months rather than weeks, we are in touch with you as vendor and the solicitor instructed to act for you as vendor. If you require a recommendation as far as legal appointment is concerned, we know well all the key players in the dental sector.
It may be that you are required and willing to continue as clinician at the practice post sale. If so we will ensure that terms of service are agreed for all retained associates including the vendor where required.
Once the transaction is agreed in terms of timescale and quantum, we would liaise with your financial advisers. It is important that the investment of the sale proceeds receives due consideration as an essential part of your retirement planning.
The objective must be to buy the appropriate practice, in the right location with good potential at a fair price.
In terms of the service that DBS can provide, we would start with an evaluation of the practice valuation prepared, ideally by an experienced valuer, which would facilitate our initial advice as to the opportunity for you.
If the indications are positive, we would then prepare a feasibility study to ensure that the project is financially viable and would provide what you need professionally and financially.
If these tests are passed we would then proceed to prepare a Business Plan with detailed financial forecasts to assist potential lenders to understand the opportunity and the lending requirement to facilitate the purchase.
After that initial dialogue we would negotiate with established clearing banks, and other financial institutions where appropriate, to obtain the best terms and rates available to you in the market.
We would then be in a position to dialogue with your solicitors to review all relevant agreements from a business and financial perspective.
After the initial work we will then be well placed to assist in respect of the completion of financial due diligence in respect of the purchase.
Once all of this work has been completed we would work with your solicitors to finalise the Sale and Purchase Agreement for your new practice.
If you wish to discuss any of the issues raised in this article, please contact George Manolescue.