| Criteria | Why |
|---|---|
| Annual collections between $2.0MM – $8.0MM per location. | Practices below $2.0MM usually have more room to scale. We help doctors that are at a plateau administratively – they are excellent clinically and have built a large practice but getting to the next stage requires offloading some of the administrative tasks. We can typically offer the most value to doctors as they reach this range of collections. |
| No Medicaid and a preference towards real Fee for Service | Government programs are excellent in providing care but we are not able to partner with clinics providing Medicaid at this time. |
| Anywhere in the contiguous United States | We want to spark scale and growth in any region in the US where we can find independent minded dentists that have achieved significant success in their practice. While we are experiencing natural, unplanned density in certain regional markets, we are always open to planting a flag in a new territory. |
| Presence of a strong Office Manager | We want our doctors doing their best clinically and if they’ve established a great practice, they typically have a staff leader who handles everything so they can maximize patient care. |
| At least once associate doctor | Additional associates help reduce the risk of a practice underperforming in the event a doctor needs time off for any number of reasons. |
| Procedure mix agnostic | We prefer GPs but like perio, pediatrics, and endo. |
| Five or more ops | The number of ops influences the maximum capacity of a practice. We favor practices with larger ops because our bet is once we help with the back-end, analytics, and other non-clinical functions, the more time the doctor and our operations team can work on growth. |
| Employees on W2 with a benefits program | A key tenet of our culture is our people. Practices that have generally not offered benefits and had most of their staff on 1099 may not be accustomed to the investment required to support, retain, and attract talent. |
Selling your practice is a significant life decision and we pride ourselves on providing as much transparency about our process as possible. While our partner dentists are all successful and financially savvy, the corporate dental industry and associated financial markets value practices based on “EBITDA” while many doctors are accustomed to thinking about their net collections.
EBITDA can be confusing, but for UDC it means the cash flow a practice generates after paying for all normal, course of business expenses. That gets tricky because doctors may run a lot of non-business expenses through their practice. We naturally want to remove those, which would be a benefit to the practice valuation, but we also need to account for any expenses ranging from benefits, compliance programs, and data and analytics programs that relate to joining our platform.
Understanding the practice requires access to its financials and patient management system, which is provided to UDC by the dentist or his/her advisors. Once practice EBITDA has been determined, UDC will provide a comprehensive Letter of Intent (“LOI”) valuing the practice based on a multiple of EBITDA. From a practical standpoint, the transaction process starts when a prospective doctor accepts our LOI, which outlines the valuation of the practice, expected timing of closing, and a number of other conditions associated with the transaction as well as once the practice becomes a part of UDC.
UDC can generally close a transaction within 60 days following execution of the LOI. The time between execution of LOI entails comprehensive diligence conducted by third parties on behalf of UDC including financial, operational, and clinical, legal documentation and discussions between UDC and the seller’s counsel, and discussions with various members of UDC and the practice operations team to provide clarity on the onboarding process. The practice becomes part of UDC when the transaction closes and can benefit from the scale UDC offers. In addition, the dentist and his staff should find life easier over time as the transition matures.