Successfully selling a dental practice to a corporate group: How we helped our client secure a profitable exit

We recently assisted an experienced dental partnership in successfully selling their popular dental practice to a corporate group, ensuring a smooth transition and profitable exit. We’ve previously supported dental clients with similar transactions, and would be delighted to talk to any sellers, buyers or other parties who enjoy this case study.

Background and How We Came to be Involved

Our client was an experienced dental partnership based in the South of England, operating a successful NHS and private multi-chair practice. Despite their extensive industry experience, this was their first need for lawyers in a sale and was a big step in their business lives.

The sellers carefully built their team of advisors and were hoping for a smooth as possible transaction. It became clear early on that their priority was continuity of patient care, protection of their loyal staff, and understanding the security of an earn-out arrangement following completion.

Initially wary of corporate buyers due to industry reputations, the partners ultimately felt confident choosing this particular corporate buyer based on their conversations with them.

We always encourage any clients to choose the team that works for them and they feel comfortable interacting with. This is a commitment to prospective clients we underline by providing free, no-obligation, 20-minute discovery call consultations to explore the matter and to really understand and highlight where we can add value.

We were delighted that the sellers chose the growing Corporate team here at The Jonathan Lea Network (JLN) following a trusted recommendation from their accountant and then a highly positive initial discovery call between us all.

Sales Process

JLN managed all critical phases of the sales process, including:

• Negotiating comprehensive Heads of Terms
• Assisting with detailed due diligence
• Efficient management of crucial disclosures
• Preparing and negotiation all transaction documentation
• Staying on the front foot to manage the push towards completion

Throughout the transaction, JLN effectively helped the sellers navigate challenges such as pricing negotiations, NHS contractual complexities and strict deadlines. Deadlines that became particularly critical given the Government’s budget announcement meaning a need to finalise the deal before tax changes that would adversely impact the seller’s hard earned sale profits.

The buyer, a dental corporate group already established nationally, conducted extensive due diligence and demanded detailed documentation; factors our experienced team anticipated and handled in an organised manner, ensuring the client remained thoroughly prepared, updated and well-positioned throughout the process.

Our dedicated team worked closely with the client. From senior solicitors through to junior assistants; all members of the team were available on direct line numbers which the sellers were encouraged to use without hesitation. This responsive approach helped us use the corporate buyer’s eagerness to do a deal to the sellers advantage. We could act quickly on matters that became the main focus at different points which helped maintain strong momentum in the deal.

It is quite often not the production of documents or the extensive legal due diligence that sees deals drag on for months and the average dental sale timeline being mentioned in the industry as six-months plus(!). It is the gaps in between, the knowing who should be doing what next, ensuring relevant parties have information they need for their next action, and importantly that all key parties know the timeframes you are aiming for.

We proactively sought phone calls, did not hide behind an email only approach and encouraged direct, timely interactions between our client and the buyer, significantly accelerating the transaction pace and reducing unnecessary points of lawyers acting as middle-men when the buyer and seller can simply agree what they mutually want as an outcome.

Hurdles for most sellers

As well as helping with the deal itself, we helped with the practical realities that sellers experience.

It is understandable to have the ‘when should we tell the staff?’, ‘can staff have a pay rise as normal?’, and similar uncertainties when selling a business where there are people who have worked with you for so long.

We aim to as far as possible help sellers make those important decisions and de-stress the personal side of these deals. This was achieved in this sale with an approachable and fully open policy for any and all questions from the sellers.

We appreciate people can be reluctant to raise what they see as inconvenient or non-legal points with their lawyers, thinking it should be all business. We often say to clients there really are no ‘silly questions’.

Successful Outcome

The transaction was successfully concluded well within the planned timeframe, achieving a deal valued in the millions (and the subsequent tax saving by completing before the tax changes).

Our client greatly valued JLN’s approachable and personalised approach and proactive attitude throughout, directly contributing to their overwhelmingly positive feedback for the whole team.

Following completion, the partners got their peace of mind from detailed sale documentation that recorded everything that had been disclosed and how the post-completion relationship would work. This allowed them to concentrate on maximising profits from their earn-out period and confidently look forward to future life plans.

Final Thought

While selling to a corporate buyer and their inevitably detailed processes may initially seem daunting; our experience demonstrates the immense benefit of open communication and close client collaboration. Corporate buyers really aren’t so bad as long as you have an experienced team working with you.

Image credit: Image by Shiola Odan from Pixabay.