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HS Financial Services - Planning to sell to your Associate?
Planning to sell to your Associate?

Planning to sell to your Associate? There might be opportunities you are missing!

 

Selling your dental practice to a willing Associate may seem like an ideal scenario, but the process is often more complex than it appears. Read our latest article to understand why the assistance of a third party is crucial to successfully complete the sale.

 

Opting to sell to trusted Associates is typically viewed as a less intricate and less stressful process than listing a practice for general sale. The buyer is already an integral part of the practice, well-acquainted with the staff, patients, and day-to-day operations.

 

For a Principal Dentist who has identified a Buyer within their practice, it might seem that the hard work is mostly done. They might think there's no need to engage an agent since a Buyer is readily available, and the sale can proceed with minimal hassle. However, even when a Buyer is in place, a tailored brokerage service is still necessary to navigate potential obstacles and ensure a smooth transaction.

 

The importance of a practice valuation 

 

The importance of a customised brokerage service cannot be overstated. The first step is always a practice valuation. Even when selling to an Associate, it's vital to determine the practice's true value in the current market conditions. A competent broker will assess the practice as if it were going to the open market, ensuring a fair price for the seller, without the risk of undervaluing the practice due to a preexisting relationship.

 

Furthermore, a broker should handle all negotiations with the Buyer. Negotiating with a colleague can be challenging for a Business Owner due to personal emotions and subjective perspectives. A third-party broker can maintain objectivity and ensure fair negotiations for all parties involved, while also emphasising the seriousness of the transaction and the need for a fair market price.

 

Prepare for the unexpected 

 

Having a contingency plan is essential, as sales to associates are more prone to falling through than open market sales. Unforeseen challenges can arise months down the line, potentially causing the deal to collapse. In such cases, access to a third-party broker's extensive database of prospective Buyers can be invaluable. With the valuation completed and the sale process initiated, it's natural to want to explore offers from other interested parties immediately.

 

Financial commitment is another key aspect. After accepting an offer, the broker typically requests the Buyer to sign a deposit schedule and provide a deposit to secure the sale. This not only demonstrates the Buyer's commitment but also protects the seller financially, covering abortive fees if the sale doesn't proceed as planned.

 

Guidance and support throughout the sale process is an ongoing necessity, as the sale of a dental practice can take up to nine months on average. Brokers must maintain regular communication with both parties' solicitors to ensure they are working towards the same goal, address any issues that arise, and ensure that all necessary documentation is ready for inspection by the Buyer's solicitor.

 

Lastly, satisfying the Care Quality Commission’s (CQC) requirements is a complex but crucial part of the practice sale. Properly following CQC procedures and avoiding application mistakes is essential to prevent serious delays in the sale process. Henry Schein MediEstates, with its extensive experience in the sector, offers a tailored CQC support service to meet individual requirements.

 

Summary

 

In conclusion, professional help from an experienced broker is essential when selling a practice to an Associate. It ensures a stress-free and smooth transaction. If you are ready to sell your practice with a buyer in place, contact Henry Schein MediEstates, the UK's largest specialist broker of dental practices, to set everything in motion and ensure your practice sale journey moves in the right direction.

 

Are you looking to sell your practice? Contact our team today for a Practice Valuation.

 

 

Posted by: Alison Bates 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:

    Business
    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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