selling dps to corporate


February 2, 2015

So you’ve built your practice or multiple practices up over a number of years. Your turnover is in the millions and EBITDA is $500K, $1M, $2M+. You’ve got debt but who hasn’t? Have you got a plan for what you will do with this successful business and who will buy it when you eventually want to sell?

You have no doubt considered a succession plan whereby one or more of your associates will buy the business from you, creating a natural transition. But there’s one problem; they can’t get finance and you are left with a great looking business with impressive financial reports, a large team of staff and an asset that no individual can afford to purchase. What do you do?

The obvious answer is to enter into acquisition negotiations with a corporate dental group, much to your accountant’s and other unqualified advisors wishes.

There are many options available to principals at the moment who have a fantastic practice and are open to corporatisation. You may be completely against the idea but does that also mean you want an asset that no-one else can buy from you and your long term plans of winding down in 5 years are gone, leaving you tied to a business, debt and levels of stress that you never envisaged. It’s a common theme.

When corporatisation first appeared a number of years ago, those who jumped on the Dental Corp and Australian Unity bandwagon reaped great rewards through capital gains and share issues that have realised multiple times their issue price. Since then, and often driven by scaremongering from unqualified advisors, the picture isn’t so rosy. Often principals hear of unrealistic EBITDA targets to maintain and clawbacks in the contract they signed that, rather than relieving their stress, actually exacerbate it.

DPS navigate the pitfalls, compare offers and ensure the most suitable succession plan…while you concentrate what you do best caring for your patients, staff and practice.