Identify, Structure, and Integrate Office Acquisitions

The traditional method of acquiring a dental office by calling the local practice transitions broker and asking for their listings is becoming antiquated. Sure, this option still exists in many markets for practices that are mature and the selling doctor has reached their retirement age. That practice from our experience will likely be brokered for 72% of last year’s gross.

The selling doctor likely will be leaving within 3-6 months, and the acquiring party will be faced with placing another doctor and dealing with the loss of the seller. However, this style of acquisition is usually not the most beneficial to emerging dental support organizations and group practices. The proper acquisition structure for today’s growing group involves a selling doctor that is able to be a true partner to the acquiring group.

This would involve that doctor to work for many years into the future and contribute to the growth of the practice, as opposed to the typical decline as one phases down their career. Typically, this type of acquisition will use a rather complex deal structure that could involve an earn-out based on performance, seller note, escrow hold back, and possibly an equity roll in the acquiring company. This style of acquisition will yield a premium valuation because it mitigates the risk for the acquiring party. Dentists interested in this type of transaction are fairly entrepreneurial by nature and usually have not listed their practice with a broker. They are typically many years away from retirement and may not know yet that they are interested in a transition. Aligned Dental Partners helps its clients locate this type of seller and assists with facilitating the transaction based on the deal structure previously mentioned.