General & Cosmetic Dentist RFS031

Founded on the belief that high quality dental care can be both a relaxing and an affordable experience, this dental practice is located in a suburb on the outskirts of a metro city in Eastern Missouri. After starting this Sole-Proprietorship over 35 years ago, the owner is looking for an outright sale or partner buy-in over the next 2+ years and is willing to stay on in some capacity to ensure a smooth transition. Open 4 days a week, they provide an expansive list of services not limited to cosmetic treatments, specialized treatments, and general dental services. By treating customers like members of their own family, this practice has established a 90% customer retention rate while adding around 20-30 new clients per month to its active client base of 3,667. Operating with 6 employees including the owner/dentist and five full-time and 1 part-time employee – a hygienist. Full-time staff include; the owner/dentist, a hygienist, an office manager, and two dental assistants. Employees have been with the practice for 10+ years and are expected to stay on in the event of a sale.

An extensive list of services has been built up over the years to keep up with the ever-changing world of dentistry and the owner partly credits the practice’s success to their many disciplines believing it has given them a leg-up on competition in the area. General dental services are a large part of day-to-day workload including; routine preventative exams & cleaning, patient education, fillings, bridges, crowns, and radiography. Some of the cosmetic services available include; teeth whitening, night/mouth guards, laser cold sore and fibroma removal, orthodontics, and veneers. More advanced specialized services are offered, like gum treatments such as scaling and root planning, implants, endodontics, root canal therapy, bloodless laser surgery and oral cancer treatment. Additionally, antisnoring devices and sleep apnea appliances are also available.

Located in a quaint neighborhood of the historic district of this city in Missouri on a 0.2-acre privately owned lot, the facilities encompass a 1,635 square foot free-standing building with 5 operatories (3 doctor & 2 hygiene). As a sole proprietor they don’t pay themselves rent, however, ideally both the land and building would transfer via an outright sale, but the owner would also be open to a lease or lease-to-purchase agreement. After parking in the back of the facility, customers enter into a waiting room / reception. Adjacent to the waiting area, is an employee breakroom with a dining table, kitchen, and a fridge. Behind the reception desk is an office space with 3 desks used for insurance processing. Beyond the rear entrance is a laboratory with quality equipment including; a Planmeca PlanMill 30-S, Model Trimmer, Triad 2000 Light Cure Curing Machine, Tuttenauer 2340 Autoclave, and a Ivoclar Vivadent Programat C52. Each of the 5 operatories are equipped with Pelton & Crane Spirit Dental Units, separated from one another by dividers with integrated Dentrix 7.5 practice management terminals. Multiple forms of radiography services are offered using equipment including Acteon XMIND Trium 3-D X Ray, Scan X X-Ray Developer and Gendex Gx 770 Dental Intraoral X-Ray. Advanced implant services are offered using equipment such as a Nouvag Md-20 Dental Brushless Surgical Implant Motor System, Camlog Implant Delivery Kit and Biohorizon Implant System. Other key equipment includes; Planmeca Emerald S Scanner, Vel Scope Enhanced Oral assessment Machine, an Air Techniques Acclaim Control Module, a SOL Soft Tissue Diode Laser, Zoll AED Plus, by DenMat, Quantex Ultrasonic Cleaner, VacStar, DentalEz C6-2 Aervus Compressor, Solmetex Hg5, Baldor lathe Polisher, and a Sybron Rotary Endodontic System. Throughout the facility are 8 integrated Dentrix workstations in total connected to a Nobilis Super Micro Server and they use QuickBooks for bookkeeping. An outright sale would include all assets, equipment, supplies and the well-established patient list.

Prior to the pandemic, collections were ~$500K, peaking at $515K (2016). Likely due to the lockdowns in 2020, collections dropped to $440K, but rebounded to pre-pandemic levels in 2021 back to $500K. Dental supplies and lab costs are estimated slightly above industry norms at ~15% translating to gross margins of ~85%. After normalizing for a dentist owner’s salary and rent expenses, thereby converting the Sole Proprietor to an S-Corp, net income is estimated 15%+ of collections. Annual discretionary cash flow earnings (adjusted EBITDA) available to a new owner is expected to be over 45% of collections or ±$220K, more than enough to provide a generous remuneration package to a new owner while servicing any debt finance needed to acquire the business. The estimated value range from this practice is between $250K and $330K (or 50.6% to 66.8% of Collections in 2021) (excluding cash, receivables, liabilities and facilities). For illustration purposes, based on weighted averages of our analysis/method, as described in our valuation report, the estimate of value of this dental practice as of December 31, 2021, is around $300K. (Note: this is only for guidance it is not RedTire's suggested price point)