General & Cosmetic Dentistry PJF662

For over 60 years, this general and cosmetic dental practice has been building long-term relationships based on mutual trust, compassion, empathy, and respect for their patients. Designated as an S-Corp and located in a suburban area in eastern Kansas, near a major metropolitan city, this practice is committed to its multi-generational clientele providing fixed and implant restorative procedures, general dentistry services (diagnostic and preventative), and cosmetic services at the highest standard. After inheriting the practice in 1989, the current owner is looking to retire within the next two years and is willing to mentor and help a new owner to ensure a seamless transition. By focusing on offering both a professional and efficient experience to their patients the practice has seen ~2,150 active patients, as seen in the last 24 months, and an average of 8 new patients per month. According to the owner, this practice is very well respected in the community they serve and they actively participate in various community dentistry initiatives through the Missions of Mercy (KMOM) and Dental Charitable Foundation (KDFC) dental programs.

Operating 4 days a week, but with the dentist recently reducing their production days to 3 (Mon to Wed), the staff of 6 includes the owner dentist (DDS), a full-time office coordinator / manager , two full-time hygienists, a full-time dental assistant, and a part-time hygienist, all who are expected to remain on after the purchase. Throughout their years of experience, the owner has built up an extensive array of services centered on their fixed and implant restorative procedures, which the dentist believes are their strongest attribute. For the most part the restorative services include fillings / cemented ceramic onlays, crowns, veneers, bridges, tooth-colored fillings for anterior & posterior teeth, and implant restorations which account for more than a third of the practices’ collections. Other treatment/services offered are removable prosthodontics, sleep apnea appliances, bruxism, nightguard & athletics guard appliances and teeth whitening. General dentistry procedures, (which the owner classifies as  diagnostic & preventative services), make up about half of collections and include; intraoral radiographs, comprehensive routine exams,  prophylaxis cleanings, fluoride treatment, in addition the hygienists are trained to provide more complex periodontal treatments. Finally, they have their own Dental Savings Plan an in-House Membership Program currently with ~125 members enrolled which is offered to patients with insurance limitations (like Medicare Advantage) or to those who pay “out of pocket “.

Located in a prominent & affluent suburban location, this 1,959 square foot facility operates from a second-floor space in a two-story executive office building. According to the owner the tri-year lease agreement will easily transfer to a new tenant. Upon entering the dental suite, you encounter a spacious, well-kept waiting area with a reception desk containing two computer terminals interfaced with Dentrix Dental Practice Management software for scheduling. As you exit the waiting area, on the left, is an admin back office also with Dentrix interfaced terminals, file storage, and access to the dentist’s private office, where they process their financial data via QuickBooks Online. Nearby is a break room with lockers and a table for the employees during their designated lunch hours. Next to the break room is an X-ray room featuring their Carestream 8000 Digital Panoramic X-Ray. Other radiology services are provided by NOMADS portable and XTG Digital Intraoral. Beyond the x-ray room are five operatories, two solely for the dentist (both right-handed) and three for the hygienists (two right-handed and one ambidextrous). All Hygiene operatories are equipped with DCI Edge Dental chairs, Cavi-Jet, ultrasonic scaler, intraoral camera & computer station with Dentrix software for radiology analysis; distilled water units, and TV screen / monitor with Spectrum Cable. Both dentist’s operatories are additionally equipped with KAVO electric high and slow speed handpieces and ultra-dent VALO lights. Central sterilization area off the operatories  contains two L&R ultrasonic cleaners, a Midmark Ritter M11 Steam Sterilizer, a Kavo QuattroCare Plus 2124 Auto Handpiece Maintenance System, a Scican Statim G4 2000 Autoclave, and a storage closet for dental supplies. Adjacent  lab area for model preparations containing a Handler model trimmer and  Dental Polishing Lathe Machine. Lastly, there’s a utility room housing a VacStar dental vacuum system, DCI L2206 Oil-Cooled Dual Compressor and Solmetex NXT Hg5 amalgam separator. The sale of this practice would include all the assets, equipment, supplies and the well-established patient list.

Collections at the practice have consistently averaged over ~$1M. Dental supplies and lab expenses are in line with industry norms ~13% of collections, translating to a ±87% gross margin for the practice. Net Profit margins are 18%+ on average, above the industry average of 15.5%. Annual discretionary cash flow earnings (adjusted EBITDA) are ~40%+ of collections, often referred to as "Doctor's Gross Income" in dentistry, is also above industry expectations, or more than $350K, ideal for a new dentist to service any debt financing and still receive a generous remuneration package. The estimated value range from this practice is between $690K and $800K or 66.9% to 77.6% of Collections in 2023 (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, 2022 (but with OCT YTD 2023 number factored in) is around $750K. (Note: this is only for guidance it is not RedTire's suggested price point)