Stock photo of a dental hygienist

Family Dental Practice V092

Map image of East Central Kansas
East Central Kansas
Status: Active

Located in a vibrant Eastern Kansas community serving both a suburban and stable / loyal rural client base, this business is primed for a dentist wanting to buy and walk into an already well-established successful practice. This family dental practice historically has operated as a professional sole proprietor entity but has recently converted to a LLC (in 2014). The business has room for growth as it currently only operates 3 days per week (T, Th & F). The business has excellent relationships with its clients and being that it operates in a family orientated town it’s not uncommon for the practice to serve multiple generations within the family. This has afforded a loyal current patient base as evidenced by the 85% repeat business that they receive. This practice has cultivated a strong history of success and its customer focus has led to an active client list of over 750 people with an average of 15 – 20 new patients per month. The owner and current dentist is interested in selling the business in the next year but is willing to stay on to help advise a new owner during an agreed upon transition period. The practice employs another 5 full-time employees beside the owner/dentist; 1 dental hygienist, 1 office manager, and 3 cross-trained front office dental assistants. Additionally, another 2 part-time employee’s work in the business.

The full range of general dentistry services include, but are not limited to; preventative procedures such as fluoride treatments, exams, and sealants, cleanings, extractions, restorative fillings, crowns, bridges, dentures, partials, and restorative procedures for implants. Specific services include; oral surgery & surgical treatments, orthodontics, radiology, public health education, pathology, prosthetic fittings and TMJ treatment. The practice comes fully equipped, including; three intraoral machines (1 in each operatory), one panoramic/cephlometric x-ray unit located in the hygiene operatory, an air compressor and vacuum pump, dental chairs, lighting and much more. The practice also has a computer offering management systems with updated software and copier/printer in the doctor’s private office. The practice offers three operatories – one for hygiene and two for the doctor. One of the doctor’s operatories also houses orthodontic equipment. Other spaces include; reception room/waiting area, business office for manager, laboratory area, supply room, restroom, and doctor’s private office.

The real-estate and 1000 square foot facility is separately owned by the owner of this practice and would ideally transfer with the sale via either a separate purchase, lease-to-purchase or a lease arrangement. This practice was originally part of a two-location practice, after the owner sold the one location this business has consistently grossed around $400K in collections / sales (370K in 2014). Currently operating on a limited basis, the current owner sees growth potential in adding additional hours and high-value procedures. Bearing in mind that the owner converted to an LLC in 2014, the estimated level of historical operating profits is $60K (or >16% of collections/sales). Annual discretionary cash flow earnings to a single new owner, i.e. adjusted EBITDA or doctors gross income, is estimated to be more than 40% (better than industry averages), i.e. ~$150K+, sufficient for a new outright owner to service any debt financing and still receive a generous remuneration package. The estimated value range of this practice from operations is between $190K and $250K (excluding cash, receivables, liabilities and facilities). For illustration purposes, based on weighted averages of our analysis/methods, as described in our valuation report, the estimate of value of the Company as of December 31, 2014 is around $230K.

Dentistry V092 Historical
2014 Cons.
Base
2015
Forecast
2016
Forecast
2017
Forecast
2018
Forecast
2019
Revenue/Sales
% Increase
370,959
-7.0
400,154
7.9
432,166
8.0
445,131
3.0
456,260
2.5
465,385
2.0
Gross Profit
GP Margin (%)
320,157
86.3
346,337
86.6
374,130
86.6
385,376
86.6
395,421
86.7
403,446
86.7
Net Income (EBIT)
NI Margin (%)
62,445
16.8
68,181
17.0
79,225
18.3
82,389
18.5
84,860
18.6
85,230
18.3
Adjusted EBITDA*
EBITDA Margin (%)
143,307
38.6
150,853
37.7
163,743
37.9
168,789
37.9
173,180
38.0
175,509
37.7

* Adjusted EBITDA = EBIT plus Depreciation and Adjustments (excludes Owners compensation)