Choosing to purchase a practice in this region has many advantages. Owners of more remote offices benefit from less stress, competition and overhead expenses when compared to their GTA counterparts. There is simply much more demand than supply when it comes to dentistry in northern regions.
There are a total of 5 dental offices in a town of 7,000 residents. The surrounding area’s population consists of over 30,000 providing an excellent draw area as people will commute in for their dental care. For our client’s office, there is a backlog of work for standard procedures and a variety of more technical services are referred out to other towns. Patients are commuting 3-4 hours to some of these specialty practices. Patients would be very receptive to specialty procedures being provided in house.
There are 3 types of owners who would be a great fit for this office:
- The first, is an investor – under our client, this clinic has always been associate-driven. They started working in the last few months to give the previous associates time off. Associates will be returning in the Fall.
- The second type of owner is one who enjoys offering the type of procedures currently referred out. As such, a visit to the practice for 3 to 5 days each month is realistic.
- Finally, the third ideal owner is one who wants to work hard for 3 to 5 years, while making a very comfortable living, with the intention of eventually returning to Southern Ontario or elsewhere. This option allows a new owner to get into the market, have access to a variety of cases, pay down student debt and build a solid financial base for themselves.
Prior to June, there were 2 Associates working in the practice – their return is scheduled for September. It is beneficial to note, that at this type of practice, patients are not tied to the dentist – other factors such as location, and team are more important.
Our client chose to purchase this office in 2019 for investment purposes. Since then, they have enjoyed excellent cash earnings year over year. Though finding financial success, our client has a young family and wishes to sell to enjoy a better work life balance. Our client is willing to stay on for a transition to ensure the transfer to the new owner is smooth and successful.
Located in a stand-alone building spanning approximately 2,000 square feet, every inch of this building has been used effectively. The modifications for pandemic compliance have been done tastefully in order not to affect the aesthetic feel of the office. There are 6 well-equipped operatories, sterilization area, private office, business office, lab and staff room. Air exchange units have been installed to ensure maximum air flow & quality.
The building is also available for sale at an appraised and asking price of $365,000. The package is an asset sale, which from a tax perspective favours the buyer.
Highlights of this practice include:
- EBITDA is ~570K with purchase price representing just under 5x
- Approximately 50 cases referred out each month (endos, oral surgeries)
- ~30 new patients per month with an additional 50 emergencies monthly
- 90% of patients have dental insurance
- No external marketing
- A/R well managed
- Fully digital
- No providers work weekends
- Building is also available for sale for $365K