It can be a daunting experience whether it’s your first purchase, or part of your growing corporate brand. For expert advice tailored to your situation, give us a call on the numbers below.
There are so many variables that can affect the transaction of your target practice, far too many to mention! The following are just a few of the things you may need to consider when buying a practice:
Assets or shares?
Is the target practice incorporated? If it is, it is most likely the seller will want to sell the shares in the company to you. What does this mean? Well on the positive side, it can make some aspects easier such as the transfer of the NHS contract. However, if purchasing the company shares, you will also be acquiring all of the companies debts and liabilities!
We will work carefully with your accountant to ensure that the seller pays for any such debts and liabilities, and provides protection for you against any unexpected issues.
NHS practices
Carefully check the performance level at the practice. Particularly with UDAs, we would expect the seller to compensate the buyer for all under performance at the point of completion.
In reality, you may have ample time to catch up on underperformance before the contract year end, but all things being equal, you as the new contractor will be responsible for repayment of any clawback, even if it was the seller who originally received payment from BSA.
Furthermore, you may have to pay an associate to perform those underperformed UDAs. You will pay the associate 45-50% of the UDA value, even though the seller has already been paid the full UDA value but has not performed those UDAs (and won’t be paying your associates either).
Defective Treatment
You must also satisfy yourself that the quality of clinical work at the practice is not a concern. We will obtain information regarding patients, capitation schemes and complaints. We will also consider whether further protection may be required in the form of indemnities, or even insist we retain part of the purchase price for a period of time.
This will protect you from any financial harm should the issues arise after the purchase, but we cannot turn back the clock. If you have serious concerns about the target practice, it may be wise to look for an alternative target. We work with a number of top dental practice brokers and can put you in touch with them.
Bank Loan
Carefully consider the term of your loan – does it fit in with your long-term plans and your plans for the practice? How long will the bank’s offer be valid for? You may need to be mindful of the deadline to ensure you obtain a preferential rate.
We work with banks and some specialist brokers who deal with funding dental purchases – call us for details.
CQC
Particularly if you are buying an NHS practice, start the ball rolling with the CQC as soon as possible!
To transfer a GDS contract via the partnership route the parties will need a CQC partnership registration (even if there is no intention to actually run the practice via a partnership). CQC applications can take some time (16-20 weeks) and the application cannot be made until all the parties have obtained a clear BDS check (via CQC) which can also take a long time to process (roughly 8 weeks). So, failing to make the CQC application could cost you 6 months or more!
If you require any advice or assistance in relation to the above please contact our Head of Healthcare, Paul Edels at paul@prosperitylaw.com or on 0151 958 0057.
