HS Financial Services - Dental Practice Valuations - The MediEstates Way
Dental Practice Valuations - The MediEstates Way



Dean Barker, Director of MediEstates, explains the benefits of annual practice valuations and provides exclusive insight into the unique MediEstates valuation process.


It is never too early in a dental-business owner’s career to seek a practice valuation. In fact, regular valuations can boost profitability and provide the best possible set-up for the next career stage.


Valuations – more than just for sales

The purpose of a valuation is not limited to selling a business. There can be huge advantages to having a practice valued on an annual basis. The worst-case scenario for a practice owner wishing to retire is finding their business is worth far less than they expected. Annual valuations beginning earlier in a career can help to prevent any unwelcome surprises prior to selling. Many of our clients use regular valuations for their long-term financial planning to help them achieve their retirement goals. In some cases, we have even helped clients bring their retirement age down. Our team at MediEstates works directly with practice owners year on year. We offer expert guidance which can improve overall efficiency, boost sales and ultimately increase the value of their businesses.


Protecting futures and stimulating growth

Knowing the value of a business provides options for the future should anything unexpected occur. It is a crucial time for many business owners and an increasing number are working to protect themselves against further disruption. However, this does not mean dental-business owners should get a valuation then batten down the hatches in anticipation of another storm. Valuations can be used to grow portfolios by providing leverage for up to 100% funding for another site. Practice owners looking to expand may have no need for lending services – an attractive prospect, particularly in the current market.


The MediEstates valuation process

The benefits of annual valuations can be seen in our comprehensive valuation process. We cover everything about the business to ensure we reach a true valuation and identify any areas for development. Our Practice Valuation Managers (PVMs) take the time to build a relationship with the client and gather the information we need, which is generally two years’ worth of accounts, alongside a multitude of information to understand how the practice operates. The subsequent document we compile will detail all aspects of the business including staff costs, associate pay rates, capitation schemes, equipment and cost lines you will see throughout sets off accounts. The PVM will process the data to find the practice’s adjusted net profit and EBITDA (earnings before interest, taxes, depreciation and amortisation). The final part of this initial stage will be to calculate two multiples – one for the adjusted net profit and one for EBITDA – to reach two valuations for the business. These multiples are essential to the valuation process. They are derived from real-time market activity and evidence from our in-house system, which houses data on all factors that affect practice values including practice size, location and income. By comparing information gathered from our client against in-house data and current market activity, we can find true, evidenced-based valuations that ensure a more accurate market value.


Two valuations are better than one

One valuation is only partly useful to clients. We need to calculate two valuations, each of which focusses on a specific buyer type. The price for a dentist who plans to oversee the day-to-day operation of a practice will be different to the price for a multi-site operator adding a practice to a larger portfolio. In the latter case the vendor can expect a post-sale agreement in which they could leave on day one, or agree to be tied into the business for anything up to 5 years. It is therefore vital to take this factor into consideration when valuing any practice.


Democratic processes and complete transparency

Following calculation of the two valuations, the PVM will submit these along with the full practice details to a panel of six Valuation Managers and myself. We review and assess each case to ensure the multiples applied are the most appropriate for each practice, after which we cast our deciding votes on the most accurate valuations. Once we have taken a practice through this rigorous process, we are ready to share the information with our client through a combination of documentation and one-to-one communication. Our aim is to ensure the client understands exactly how we have reached the valuations and why they are some of the most accurate on the market. But our work does not stop there. We offer expert advice to improve the efficiency of dental businesses with the use of benchmark figures relevant to their practice type.


Benchmarking to analyse costs and increase sales

The extensive practice information we gather allows us to retrieve benchmark figures for virtually every part of a business from virtually any part of the UK. For example, we can compare staff costs against those of similar practices, revenue streams of same-size practices, or the average UDA rate for different regions. We can even compare insurance prices for various types of practice to see if our clients are getting a good deal. As well as working to analyse practice costs, we also use benchmark figures to help business owners boost revenue by, for example, comparing regional treatment prices or chair time percentages per practice type. Even small changes can yield good results. Our guidance is also backed by a superb support network, with Henry Schein and Software of Excellence ready to cover the financial, software and supply needs of any practice.


Empowering practice owners

Benchmark comparisons and annual valuations give a practice the best chance of maximising value in every area, from property rental yields down to the cost of a bur. In addition, MediEstates can provide an overview of the entire market, including current conditions, information on private equity and corporate activity. Business owners can use these insights to understand the market and gain confidence from the knowledge they are running their practices as efficiently as possible. In short, benchmark comparisons and annual valuations from MediEstates can inform and empower practice owners.


Dean Barker

Helping dental practice owners develop an exit strategy, group sales, corporate and group acquisitions, increasing business EBITDA. Background in accountancy, operations and commercial management. 

Lead the MediEstates business which values 350+ dental practices per annum and is the Leading Dental Practice Broker in the Sector.


If you are interested in finding out more, please contact the MediHoldings on 01332 321694, info@mediestates.co.uk or www.mediholdings.co.uk


Posted by: Dean Barker on

General Buyer Terms

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 2018. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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