Young doctor, growing practice in a growing city, will continue to expand their practice with the assistance of their new Invisible DSO partner.Read More
Two Pediatric Dentists, very profitable practice, another example of LPS informing practices in the area of an already underway transaction and being able to achieve a higher valuation for all.Read More
Doctor was not looking for a partner, was informed about this opportunity, LPS was able to include their practice in a transaction that was already underway for much higher value.Read More
40+ Doctor, extremely profitable practice, creative structure for expanding Invisible DSO.Read More
Young Doctor, extremely profitable practice, creative structure for expanding Invisible DSO.Read More
At the 2020 Chicago Midwinter Meeting, Chris Salierno, DDS, Editor of Dental Economics Magazine talked with Chip Fichtner, Founder of Large Practice Sales about the unique aspects of invisible dental support organizations (DSOs).
To learn more click HERE and receive both the Dental Economics Articles and our New Silent Partners Invest in Great Practices – White Paper.
Recent Articles from Dental Economics written by our Founder, Chip Fichtner
What happens to practice values now? (May 2020)
Special Report – Finance and Business – June 2019
Large Practice Sales (LPS) helps dental professionals of all specialties monetize their life’s work, all or in part. Our unique niche is matching great doctors who are not yet ready to retire with Invisible DSOs which become silent partners in your practice. Doctors get CASH now at today’s high valuations and remain running their practice under their brand for X years in the future with their new partner’s capital and support to accelerate growth.
As principals, we have bought and sold dozens of businesses over the last 30+ years including those in the dental industry. Members of our team have owned and/or operated large practices. As your advisor, we put on our “principal hats” and help doctors realize the highest value (CASH) for their practices. Your practice may be worth more than you think to a specific buyer, at the right moment in time, if you choose LPS.
Our compensation is based solely upon the sale proceeds achieved by our clients. There are no retainers or expense charges. No fees are ever paid to us by buyers. Our only compensation is tied directly to the successful completion of the sale of your practice; we get paid when you get paid. Therefore, we are very selective in the clients with which we choose to engage.
Join us for a special FREE 1 Hour interactive discussion led by the principals of Large Practice Sales.
• Why NOW is the time to understand your practice value
• What buyers/partners want, what they don’t want and why
• Sell all or sell part and stay to grow?
• Who are the various buyers?
• What are real transaction values, not appraised values?
Plan now for your exit in 5,10 or 20 years.
Most importantly LPS is only paid by our clients, the doctor. Other advisors are paid by both the Buyers and Sellers. This is unique to LPS and helps us get the highest values in the industry. LPS focuses exclusively on identifying partners for, or buyers of, larger dental and dental specialty practices. Although there are exceptions, our typical client practice has $500,000 or more after doctor compensation in practice net earnings or EBITDA. We are compensated solely by our doctor clients and LPS is paid nothing unless a transaction is successfully completed.
Values of businesses including dental practices rise and fall. At the moment, values of larger practices in specific areas are no longer at the historic highs of 2019, but we believe 2020 will be the best time to monetize a practice for the next three+ years given the Covid-19 crisis. We have achieved values of 4X+ collections in 2019 with many over 2X. The laws of supply and demand are kicking in now. More doctors interested in partners and fewer and more nervous partners. Taxes are going up. If the Democrats win, they have made it clear that the taxes on investment gains and business sales will double, reducing your proceeds from a transaction by 20% or more. Doctors also face risks including health/accident issues and unforeseen natural disasters that can impact practice values. Recall hurricanes Michael, Irma, Maria, Nate and the Santa Rosa fires. Buy low, sell high. The first seller in an area often achieves a higher value over the second. (See First Steps and Higher Values Memos)
While there is no stock answer, it is an easy and FREE process to discover the value of your practice today through LPS. Values are impacted by the size and type of practice, growth rate, location, timing and most importantly the doctor and his/her future goals. Values are also variable depending upon whether a doctor seeks to sell all or only part of their practice. Each buyer has different and changing objectives which may include significant consideration based upon future earnings. (See Doctor Matters Memo)
We handle both types of transactions, but most of our clients have an average age of under 50. They are not ready to retire but are interested in monetizing a part of their life’s work in the current value bubble to secure their future. These doctors are interested in gaining a silent partner to accelerate their practice growth without personal risk, but with continued upside via retained equity ownership. With the right partner, their retained equity grows in value for a second liquidation event down the road but locked in at today’s high values. (See DSO Benefits Memo)
In most cases, higher values are achieved with a doctor interested in remaining with the practice to execute a growth plan for several years. Generally, partners/buyers would like the great doctors to stay forever. However, we have completed transactions where the doctor retired the day of closing.
This is dependent upon the doctor’s and partner/buyer’s goals, strategy and pre-transaction agreement. Most partial transactions require the doctor to remain running the practice under his/her brand for at least five years.
Again, this is negotiable, but in most cases the doctor is compensated based on a normal market rate for the area. In an orthodontic transaction, this is typically an annual salary, with GPs and other specialties often compensated by a percentage of their production or collections.
This is 100% negotiable depending upon the doctor’s goals and the particular transaction. We have completed transactions where the doctor chose to work only three days per week and others where the doctor’s time commitment decreased over the ensuing years. It is an important part of the early planning and negotiations. In a typical transaction the doctor commits to working as hard in the future as they have been in the past.
This is buyer/partner specific, but in most IDSO transactions, the team members are still 100% managed by the doctor, and typically receive better benefits.
In theory and by law, the doctor makes all clinical decisions. However, there are certain buyers, who we do not work with, which may have other views of this important element.
This is buyer/partner dependent, and something discussed up front early in the process, but usually not. The IDSO partners goal is to assist your practice in growth, not attempt to break something they just spent millions to buy.
The primary groups LPS works with are IDSOs which value the local brand and goodwill of the doctor. Their goal is that the community has no idea that the new partner exists. Other, buyers, typically in 100% transactions, believe their nationally consistent brand is most valuable. (See Invisible DSO Memo)
Purchase consideration can be paid in multiple forms including primarily cash plus retained equity in the practice, equity in the parent, or any/all of the above. A typical partner transaction involves the doctor selling 60 to 90% of their practice for CASH up front and retaining a partial interest in their own practice and/or equity in the parent. Each transaction is customized for the doctor’s goals and needs. However, we counsel our clients to have a guaranteed exit option on any non-cash consideration and to understand both the upside and downside of certain equity consideration structures.(See Structures Memo)
Please consult your tax advisor on this important topic. However, in the $200,000,000+ of transactions LPS initiated in the last 12 months, over 95% of the initial consideration has been treated as Long-Term Capital Gains for the doctor. This may not matter in 2021.
It starts with a confidential discussion between you and an LPS principal and the signing of a mutual non-disclosure agreement. We will want to understand the basics of your practice including rough financial performance and practice metrics over three years, your general goals and future practice and area potential. From that discussion and a review of preliminary financials, we can give you an idea of the value potential for your practice.
If this value range is of interest, we will then present an engagement proposal outlining the steps of a sale in detail and the LPS compensation structure. There is no obligation or fee for this process.
LPS has a very unique compensation structure which ties our interests directly to the doctor’s. First and foremost, LPS is paid nothing unless a transaction is completed. LPS fees are only paid when you get paid. There are no valuation fees, retainers, expense reimbursements or compensation other than a percentage of the consideration you receive, when you receive it. The fee usually totals less than 10% of your consideration. LPS is paid zero on your future compensation for providing care. Knowledge of the buyer/partners and multiple transaction experience is LPS’ most valuable currency. We close transactions or we do not get paid a dime.
To learn more about the potential value of your large practice to an Invisible DSO in today's heated market, or are a DSO interested in the best practices in the country today, please call
or email: email@example.com
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