Whether you have worked hard to build a thriving dental practice and are on the brink of selling it or you are taking the plunge to buy your own dental practice, be sure to follow leading dental acquisition Solicitor Leah Groves’ five essential tips to make the process a success…
1. Instruct a dental specialist Solicitor
It is vital that both the seller and buyer instruct experienced dental specialist solicitors well versed in the nuances of dental sales and purchases. This ensures that the deal runs smoothly, and all parties’ interests are sufficiently protected, therefore minimising unnecessary delays and costly mistakes.
It is advisable for the seller to get a specialist solicitor on board as early as possible, ideally before the transaction begins, to collate and review the practice paperwork. This will help flush out any potential issues in the sale process at an early stage.
2. Valuation from a healthcare valuer
Whether you are the seller or buyer, it pays to take the time to get a formal valuation for an accurate sale price and as evidence of a third party valuation if ever required by HMRC. Ensure that the valuation is compiled by a suitably experienced dental broker who knows the dental acquisition market inside out, even if the sale is to an associate. This ensures that the value can stack up and be verified by the buyer’s bank’s valuation.
3. Due diligence process knowledge
The buyer’s legal team will carefully review specifically requested information about the practice and the property from which it operates provided by the Seller to identify any issues and suggest resolutions to the same. This is known as the ‘due diligence process’ and includes commercial contracts, equipment inspection certificates and maintenance agreements, up to date accounts, NHS activity statements and staff contracts. The Seller should gather this information as early as possible in the sale journey to flush out potential issues asap.
4. Property preparation
The buyer is likely to be obtaining finance for the purchase and the bank will be taking security for the loan over the property from which the practice operates – whether it is freehold or a lease. Accordingly, the seller should ensure that the property title deeds, EPC, Asbestos survey, buildings insurance and planning permissions are to hand to facilitate the change of ownership and that there are no nasty issues lurking in respect of these.
Where the property is occupied under a lease the landlord will need to be involved to transfer the lease or grant a new lease direct to the buyer. Also, the term of the lease must be sufficient for the bank’s lending purposes; again, your dental specialist solicitor can assist here.
5. Marketing via dental practice selling agent
Both sellers and buyers should register with dental practice selling agents who will vet the practice and ensure that the seller and the buyer are a good match. The third party agent also deals with the price negotiation!
Specialist and experienced dental professionals are the key to ensuring a successful acquisition that protects your needs. You have been warned!
Leah Groves, a leading dental acquisition Solicitor at Howman Solicitors and member of ASPD, has an in-depth understanding of the niche professional and commercial requirements of dentists, having acted for them for over 18 years. She takes a commercial pro-active approach to ensure that deals are finalised as quickly and seamlessly as possible.
For any enquiries please contact Leah Groves