A practice acquisition might be one of the most significant transactions of your life. You’ll want to make sure there are no costly surprises.

  1. Assemble a Winning Team. A team is going to be critical to making sure complex elements of the transaction are covered thoroughly and correctly. The seller’s team is an attorney, an accountant, a dental practice broker, and a financial planner. The buyer’s team should have an accountant, financial planner, lender, insurance agent and consultant. You might ask yourself, “Do I really need an attorney?” Just like you’d want a dentist doing your dental work, you’ll want an attorney doing your legal work. If the terms of the transaction are not optimal, it could negatively affect you for years to come.
  2. Consider what happens after the sale. You will need to decide if you want the seller to continue working for the practice after closing. It’s important to be transparent about this to save time, money and headaches. If you aren’t on the same page with the Seller with regard to whether or not the Seller will work back in your practice and if so for how long, the deal may not consummate. Better to know this ahead of time than later after you have spent fees and time.
  1. Non-competes are crucial. You don’t want your seller and/or their associates competing with you. Make sure you have valid and enforceable non-compete agreements with all involved, including associate dentists. Every state law is different, so you will need to consult a lawyer who transacts deals in your state or nationwide like our firm does. Most non-competes have two important elements: A geographical radius (how far away the seller and associates must be from the practice you are buying for them to start a new one) and a time frame determining when they can compete within the restricted geographical radius. Any existing non-compete clauses the seller has with associates also should be assignable to you as the buyer.
  2. Contingencies at closing. There are always issues that can arise to upset a deal. For example, financing might not be funded, or there may be a real estate issue. If you are signing your deal in advance of your closing date, make sure you consult your lawyer regarding key contingencies to implement into the purchase agreement.
  3. Promises Made, Promises Kept. You will want to require all representations and warranties (promises the parties make to each other) to be true and accurate. This applies to both parties in the transaction and it’s essential to ensure transparency in the transition that will save you time and future legal headaches.