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Selling your practice to a Corporate – is it for you?

Selling your practice to a Corporate – is it for you?

The bulk of the Thorntons Dental Team’s work relates to the sale and acquisition of dental practices. Over the course of 2021, we dealt with practice deals in Scotland with an aggregate value of around £35M, and in those cases the buyers ranged from individual associates buying their first practice, to the largest corporates further adding to their group of practices.

For some sellers, the individual buyer fits the bill best, and there will always be a place for such buyers in the practice market. However, there is no doubt that the corporate groups are very active, and are continually increasing the number of practices which they own in Scotland, and there is no sign of this pattern changing in the near future.

So for those thinking of selling, one key question is often whether selling to a corporate suits their retirement plans. To decide that, it is worth looking at how a corporate purchaser might structure their deal.

Price Structure

First of all, many of the corporates pay a proportion of the purchase price (often 70-80%) upfront when the sale is completed, with the balance being paid at a later date. In some cases the deferred payments will be conditional upon certain targets being met. As with most elements of a practice sale, the devil is in the detail as regards any deferred price, so it is particularly important that a selling principal fully understands how that deferred element will work in practice.

In addition, it is essential that a seller seeks their accountant’s advice on the tax liabilities which will arise from the sale, and when they will be payable. Despite part of the price being deferred, tax may be payable on the whole price before the deferred elements are actually received.

Tie in Period as an associate

Alongside deferral of part of the price, a corporate will often require that the seller remains with them for a minimum period of time, usually for the same period as the payment deferral period. So if part of the price is payable in 2 years’ time, the seller must also stay for that period.

This is understandable, as the seller will in most cases be very important to the success of the practice. To continue that success, and to help transition the practice over to its new owners, the presence of the seller for a period of time can be key.

That doesn’t suit some sellers who simply wish to sell their practice and retire fully at the same time. However, for some this is ideal, and allows them to have a continuing source of income for a few years. We have in fact found that, post lockdown, some principals were (and remain) keen to rid themselves of the burden of management of their practice but weren’t ready to stop working. In those cases a sale to a corporate might help them to achieve those differing priorities.

Surgery Premises

Many of the corporates are reluctant to spend their money on premises. Their priority is to expand the number of practices which they own, and they won’t buy premises themselves. Where you own your premises, you have a decision to make. Do you retain the building and lease to the corporate buyer? If so, you need to agree a suitable rent, often based upon a surveyor’s valuation. You also need to set out very clearly who will be responsible for repair and maintenance of the building going forward.

Bear in mind that if you lease the building to the buyer, you will become a commercial landlord, which does bring a certain degree of responsibility.

Alternatively, if you really want to sell the building along with the practice, many of the corporates have connections with property investors who can buy the building from you at the same time. The buyer of the property will then lease it to the corporate for the ongoing operation of the practice.

Whichever route you take, we would tend to recommend that the property elements of the sale are agreed at a relatively early stage. The property aspects of the sale are sometimes seen as a bit of a side show to the practice sale. However, the detail of the property arrangements could make the difference between you having an overall deal which works for you financially, and one which sells you short.

In all of this, it is very important to seek valuation, accounting and legal input from advisers who are familiar with how the corporate buyers work, and so you should make sure that you obtain the right level of advice when going into sale negotiations, which after all are the culmination of your hard work in building the practice up over the years.

Michael Royden is a Corporate Solicitor specialising in advice to the dental profession.  We are always delighted to talk without obligation about whether we might meet your needs. Call Michael on 03330 430350 or email

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About the author

Michael Royden
Michael Royden

Michael Royden


Corporate & Commercial

For more information, contact Michael Royden or any member of the Corporate & Commercial team on +44 1382 346222.