Acquiring a Dental Practice and Merging it into an Existing Practice

I have an opportunity to purchase an existing dental office that is 3 miles away. The doctor is in her 60's and is willing to sell and work in my office 2 days a week. Time frame for her to exit the office will have to be evaluated. It is a FFS office with no PPO, similar to mine with an exception that I am a provider to Delta Premier and United Concordia. She is willing to share her numbers before meeting with the broker to see if it is feasible for us to pursue. Any advice what to ask and look for?

You should have her run reports of patients that have those providers to see if any of them will be able to use them in your office. Then get a breakdown of production by provider to see how much additional hygiene hours you'll need. Once you do that, get a list of her employees and their hourly rates and find out what benefits she may pay to compare with yours. You'll also have to compare vacation days given, etc, and compare with yours. If you hire any of her employees, the compensation packages, benefits and PTO days will have to match. You will need to evaluate the fee schedules and find out if you do any procedures she doesn't and vice versa.

These are just a few things off the top of my head.

Thanks Tim for your responses. She wants to practice with us 2 days a week. Will the purchase price be lower or higher than a typical practice acquisition without the dr staying on?

The price should be less than the typical acquisition where you're also buying tangible assets and the space.

I can't say I've noticed differences in prices with or without the doctor staying. That's up to the parties and I just haven't seen it used as a negotiation point in the majority of the deals I'm involved with.

All that said, you certainly stand to retain much more of the patients with the seller staying on board and assisting with her GW transfer as opposed to having her out immediately.

This first appeared on Dentaltown.

Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com

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