Pluto Partners’ Max Bazzucchini navigates the path to a successful dental practice sale from offer to completion.
A well-prepared data and sales information brochure will not only contain current and historic company information but also forecasts and financial modelling around potential synergies and growth. It will ensure optimum positioning of the business and, as all information is prepared in advance, it will also accelerate the entire sale process.
From the data collated an experienced selling advisor will produce a business summary marketing the acquisition opportunity without divulging the seller’s identity, and a carefully crafted Information Memorandum to drive value by highlighting unique opportunities and potential synergies to make your business more enticing to potential dental practice buyers.
The Importance of Creating a Competitive Environment
In order to exceed the estimated business value, it is essential to secure the right buyers to create competitive bids and significantly increase the sale price. Intelligent, bespoke research should be undertaken to identify potential purchasers using a combination of global intelligence tools and a database of active financial and trade buyers.
It is essential to think outside the box and look at synergistic buyers as well as those within the dental sector. Through such synergies and economies of scale, the business will be worth differing amounts to different buyers.
The optimal purchaser is one who has a “we want, we need” motivation who drives their share-holder value via acquisition. Carefully positioned synergies reaching out to several interested parties by utilising financial modelling and future visioning will demonstrate the strategic and financial benefits of the acquisition and drive competitive interest in the business. This means inviting offers to enable the market to drive the price.
Negotiate, Agree and Structure an Exceptional Deal
Agreeing an exceptional deal requires significant experience and expertise. It requires understanding of the other side’s motivators, and the ability to “walk in their shoes”. Win the big points and lose the small ones to secure optimum terms. This is best achieved in a non-adversarial environment, where listening creates understanding, but also with a very clear presentation of the alternatives and key selling points. Timing and effective delivery of negotiation strategy are critical to create a win/win situation.
Today, there are increasingly complex deal structures in sales, with earn outs and deferred payments. Considering how best to protect these positions is also critical, and expert advice right from the start will be crucial in this respect. There is also a trend in partial exits or elevator deals which enables owners to both capitalise on their exit but also keep in the business game.
It also helps the buyer take the company to the next level but on a de-risked basis – which should also result in owning shares with a greater value in the future.
The Importance of a Dental Sales Advisor to Project Manage the Deal to Completion
Once a transaction is agreed and the Heads of Terms (HOTs) document is drafted, this will help summarise the deal to avoid later misunderstandings, and, again, an expert dental sales advisor is invaluable here. The improved data-pack produced early on in the process will have provided the transparency needed to accelerate the offer agreed to completion phase.
Nonetheless, careful project management is required to manage the project to completion, orchestrating all the parties, and creating a timetable. Deal fatigue or worse, failure, can result if a poor dialogue or slow information occurs once terms have been agreed.
The parties need to continue to listen and aim at a win/win transaction through experienced dental sales advisors such as the team at Pluto Partners. We are expert at acting as middlemen and orchestrating all parties to a highly successful conclusion.
Max Bazzucchini is a Founder & Partner with Pluto Partners. He is an ACCA Certified Business Valuer and Commercial Negotiator.
See the original article here: Dental Industry Review