In our last blog post, we talked about “the End in Mind” being more financially-oriented as it related to exit strategy and deal structure, specifically around the aspects of: transaction value and actual structure of the sale; requirements post-sale; and strategy necessary to achieve the intended outcome. 

Over the course of 2018, we were fortunate to host over 50 different businesses in our office. Some of these were private equity groups and search funds; others were established, founder-led group practices; and some were solo doctors with only one or two locations under their belt.  That’s quite a variety, but they all shared two things in common…

We work with clients all over the U.S. and inevitably hear comments like: “My five-location group generates about $12,000,000 in revenue.  I’d like to build it up over the next five years and sell it for $50,000,000.” 

OK…if you say so. 

Do you want to borrow $49,000,000 to make that happen?  I kinda doubt it.

What do you care more about: the amount of the sale or the amount you put in your bank account?  If your answer is the latter, then you need to pay more attention to the amount of debt you take on and the impact that the tax rate will play because both of those will be paid off before the sale proceeds are deposited into your account.

Wisdom & Wandering from the Herd

Last fall, my partners and I all attended the McGuireWoods Healthcare Private Equity Conference here in Charlotte.  While most of the southeast was still battling the remnants of what was Hurricane Irma, we had an opportunity to listen to sector experts as they tried to navigate the swirling winds of the healthcare industry.  Make no mistake – healthcare is hot.  There is a lot of opportunity, but it doesn’t come without an equal amount of risk.

Here’s what we learned…

The dental industry has recently experienced a tidal wave of emerging group practices.  These emerging groups are creating waves for a number of reasons, but one of the most notable is the staggering dollar amounts buyers are seemingly willing to pay for them.

Have you ever wondered if all it was actually true?  Did your buddy who sold his group really walk away with $50,000,000?! 

Or are there other details behind the dollars?  There are – and we’re going to unpack those details right now.

As we welcome in 2018, many people will be celebrating the New Year with a glass – or bottle – of bubbly.  It’s festive.  It’s celebratory.  It’s tradition.  It also got me thinking…

If 2018 is your year to sell your group dental practice or DSO, what’s the best bottle of champagne you should have in the fridge?  Well, here are the official “TUSK Top FIVE” bottles of bubbly to celebrate the sale of your Group Dental Practice or DSO...

You've heard all of the stories about industry colleagues and fellow dentists making millions selling their businesses.  Is your time next?   Are we at the high-water mark for business valuation?

We have had the honor of speaking at many conferences this year and have fielded too many questions to count.  Having said that, one particular question seems to come up with great frequency among those who own group practices:

“What’s the difference if I’m an S, C or LLC as it relates to the tax impact of selling my business?”

Well, we’ve also closed several deals recently (and have several others in the works) where the corporate election will have a major tax impact on the outcome of the deal.  There are structural considerations of the transaction that can offset some – not all – of the tax impact, but make no mistake – corporate entity election swings major dollars at the closing table. 

All of those years.  All of that effort.  How many sleepless nights?  Personal guarantor on each and every loan with the bank.  Recruiting all of those associates and leading your team to a point of stability.  Your business has finally arrived at an admirable level of success – not to mention profitability. 

And then the phone rings. 

On the other end of the line is a guy you’ve never met who seemingly knows everything about your business…and he wants to buy it!  What an incredible justification for all of your hard work!

So, what are you going to do?