MediEstates - Preparing to sell
Preparing to sell

Preparing to sell

Phillip Barker offers his top tips for those preparing to sell.

Selling a practice is one of the biggest undertakings a practice owner will make and there are numerous things to consider. Here are my top tips for those looking to sell their practice:

Get your house in order
Before you even get a valuation of your practice, it’s important to check all your contracts with both internal and external people. For instance, many practice owners have informal verbal agreements with their staff but when looking to sell it’s crucial that employment contracts are formalised so that the buyer can understand their obligations and an accurate valuation of the practice can be made.

Satisfying contracts also includes hitting your UDA targets, if applicable. Any potential purchaser will want to be sure that the practice is meeting its NHS contract. Under performance will be a red flag to a buyer, and may raise concerns about underlying inefficiencies.

Satisfy the Care Quality Commission (CQC)
This is potentially the most complicated part of a practice sale. Firstly, you need to check that your practice is correctly registered. If it isn’t you need to rectify this immediately.

When selling a practice, the practice owner usually has to apply to enter a ‘partnership’ with the incoming buyer. But beware – it’s crucial that the application form is completed correctly first time as it will be rejected if a mistake is discovered.

Timing the application is also critical as you don’t want to submit it too late, but you also don’t want it to be too early; if your application is accepted by the CQC but isn’t invoked for an extended period of time, it may become invalid, in which case you will have to apply again.

Be prepared for the bank’s valuation
I always advise buyers to obtain indicative terms from their lender as early as possible and part of that process is the practice valuation. From a seller’s perspective it’s vital that the valuation is as accurate as possible and completed by experienced valuers who know the market. If there is a shortfall between your valuation and that of the purchaser’s bank the buyer may need to find significant funds personally before the sale can continue, causing untold delay and frustration. To avoid this, choose a broker with experience in the dental market and knowledge of latest market trends and current bank valuations.

Be prepared for indemnities, warranties and redemption requests
It is standard for buyers to request that a number of indemnities and warranties are written into the contract when negotiating the terms of a sale. For example the buyer might insist on being indemnified against any possible claim for defective work completed by the vendor or to cover failure of equipment. It may also include an undertaking that the seller will not work within a certain radius of the practice for a period of time, or that the seller remains working in the practice for a specified period after the sale to ease the transition process. Vendors should also be prepared for a buyer to request that a percentage of the purchase price is held in reserve. This happens most commonly when there is a certain amount of private revenue expected, but not guaranteed. It is the responsibility of the vendor to have all the paperwork and information in relation to the business ready for inspection by the buyer’s solicitor. We always encourage vendors to put aside some dedicated time in order to complete this task which can be time consuming. The more prepared you are, the easier the sales process will be.

Choose the right professionals
Maintaining the momentum of a transaction is often a difficult area and selecting the right professionals to support you can be a big help. Choosing an experienced and proactive dental solicitor is one area that is crucial to a seamless practice sale. They need to understand NHS dental contracts, have knowledge around CQC compliance and be easy to communicate with. There’s a lot involved in selling a practice and our advice is to surround yourselves from the start with trusted advisers, who have good experience in the dental sector.
Posted by: Phillip 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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