Grouping Together Increases Value
Monday 1st September 2014
Over the course of the month of August and aided by Dental Elite, a group of six individual dental practice owners in the North-East successfully completed on the sale of their seven dental practices to a small corporate from the South of England. The grouping of the practices together allowed the group to secure a value c15-20% more than their individual valuations and for one practice a price of £300,000 more than a heavily negotiated offer from a well known dental corporate.
Whilst the sale of the group was a little more protracted than a typical sale it was heavily contested by two main contenders, neither of whom were groups with a presence already in the area. The negotiation process also allowed those with greater private turnover to be free from the burdens of private income targets and deferred consideration. They were also in the enviable position of being able to choose the offer from the bidder they felt most reflected their clinical ambitions and who they and their teams would enjoy working with most in the forthcoming years.
Dental Elite commented; “Whilst the practice sale negotiations were at times more fraught than most, purely down to the number of stakeholders involved in this transaction. I feel the Principals recognised that a substantial premium was paid by the group to secure a platform entry into another area. Put simply, practice sales in London & the South-East are now so competitive between individual purchasers that I feel both bidders wanted entry into another area in the country where they can add to their estate with slightly less competition and also to give them access to more practices that come to market. Given that both of the big corporate’s walked away from this deal I also feel it only serves to prove that just because you own a bigger practice, it doesn’t mean the ‘best’ purchaser for the practice is one of the big boys ”
Do practice vendors always work better together? We discuss this over on our blog: Practice Vendors Better Together?
For further information please contact Dental Elite on 01788 545900
Dental Elite are a nationwide specialist dental practice sales agency who offer all practice owners a ‘Non-Obligatory Free Practice Healthcheck’ so they can procure an indication on both the value of their business, how that value has been derived and also ways in which value can be improved in the run up to exit.