Impossible Promises — How should we navigate the changing landscape of buying and selling dental practices?

January 17, 2017 | Dental |

 

A client I have known for years recently called to say that he had  been approached by a corporate entity to buy his practice.  He called me for a  second opinion to make sure he was doing  the right thing.  In the presentation, the investor dentist/corporate buyer made a claim that he/she would pay the highest price for the practice compared to any other offers received in a private sale or open-market sale.  Is this a defensible promise for a buyer to make?   Theoretically, yes.  If a  practice does not go to open market, any price that a buyer pays will obviously be the highest offer the seller receives, because the seller is not accepting other offers.   Yet, if the buyer suggests that his offer will be the highest of any other, and the practice sale does not go to the open market, then it’s an absurd claim that can’t be validated.  If no one else is given the opportunity to buy the practice, how can the first offer be proven the highest?   This type of claim is occurring quite often these days because there is a limited supply of good practices for sale and the investor dentist/corporate entity is very flexible and dedicates senior management’s time to soliciting and focusing on practice acquisition.  In the traditional marketplace there are many buyers.  A brokerage firm could have over 1,700 registered potential buyers and these buyers then rely upon brokers to introduce them to the various opportunities.   To bring clarity and to address concerns regarding advantages/disadvantages to selling a practice to an investor dentist/corporate buyer, the Vancouver District Dental Society assembled a panel to discuss and debate the phenomenon of corporate dentistry in the Canadian dental marketplace.  I was a guest on the panel along with Dr. Robert Staschuk, president of BCDA; Jerome Marburg registrar and CEO of CDSBC; Nadean Burkett,
CEO & executive director of My Practice Matters; Dr. Amin Shivji, founder & leader of 123 Dentist; Graham Rosenberg, cofounder & CEO of dentalcorp; Dr. George Christodoulou, Co-Founder & Co-CEO of Altima Healthcare; and Leslie Carrafiello, VP of operations of Smiles First Corp.  A follow-up column will be published once various participants are interviewed post-panel.   And please weigh in with your thoughts on this new frontier in the dental world.