When selling a dental laboratory, you can expect to incur various costs, including professional fees, taxes, repairs and upgrades, and potential renewal of licences. The exact costs will depend on factors such as the size and condition of the laboratory, the complexity of the transaction, and the fees charged by the professionals involved. This article aims to help dental laboratory owners who are considering selling their dental laboratory understand the responsibilities of the professionals involved in a disposal and the potential associated costs.
Agents: 1%-5% of the final sale value
A dental laboratory agent can help you sell your laboratory by:
Valuing the laboratory: The agent will help you determine the value of your laboratory by analysing its financial performance, assets, and liabilities. The team at Eclipse Corporate Finance has significant buy-side experience working for dental corporates, giving us a unique insight into how corporate acquirers approach dental laboratory valuations.
Marketing the laboratory: The agent will develop a marketing plan to attract potential buyers, using a range of tactics such as advertising, direct mail, and online listings.
Screening buyers: The agent will pre-screen potential buyers to ensure that they are qualified and have the financial resources to purchase your laboratory.
Negotiating the sale: The agent will negotiate the terms of the sale, including the purchase price, payment terms, and contingencies.
Managing the transaction: The agent will manage the entire transaction, including coordinating with solicitors, accountants, and other professionals, and ensuring that all necessary documentation is completed and filed.
The Extra Steps Eclipse Corporate Finance Take
Marketing the laboratory: Eclipse Corporate Finance specialise in high-value dental laboratories delivering all of our deals ‘off-market’, identifying buyers through market research rather than online listings, in order to protect the sellers' confidentiality.
Bespoke information memorandum (IM): We understand that every dental laboratory is different with its own unique character. We go to market with an IM that is tailored to the unique aspects of the dental laboratory being sold. Providing buyers with a professional presentation of your dental laboratory will help differentiate the laboratory from others on the market, increase buying interest and ultimately secure a successful sale.
Data room: unlike other agents in the dental sector, we work with you to populate the financial, tax and commercial elements of the data room before the laboratory is taken to market. The data room is an online portal used to store documentation the buyers will wish to see during the due diligence process. In the dental sector this role is normally passed onto the solicitors after ‘Heads of Terms’ have been signed. Having Eclipse taking on this responsibility has three benefits:
It saves you additional solicitor fees as the cost is included in the sellers' fee;
Every financial document that is placed in the data room is reviewed in advance;
It promotes a smoother and faster sale.
Databook: In addition to a bespoke information memorandum, preferred bidders will be provided with a data book, this includes all the financial information relevant to calculating the ‘underlying EBITDA’. This protects the sale value and eliminates the potential for ‘chipping’.
Accountant: normally charge up to £5,000 depending on the amount of work required
An accountant can help you manage the financial aspects of selling your laboratory by:
Advising on tax implications: The accountant will help you understand the tax consequences of the sale, and advise you on strategies to minimize your tax liability.
Structuring the transaction: The accountant will help you structure the sale in a way that maximises your financial benefits, taking into account factors such as your tax situation and cash flow needs.
Assisting with due diligence: The accountant will assist with the buyer's due diligence process, helping to ensure that the buyer has accurate and complete financial information about your laboratory.
Solicitors: may charge a fixed fee or hourly rate and normally amount to no more than 1.5% of the sale value
A solicitor can help you navigate the legal aspects of selling your laboratory by:
Supporting due diligence: The solicitor will manage the legal due diligence process by supporting with the collation of required documentation and managing queries from the buyer's advisors.
Drafting the SPA: the SPA or ‘Sale & Purchase Agreement’ covers key aspects of the sale, such as the purchase price, payment terms, warranties and indemnities, and closing conditions. There will be input from the other professionals and when the SPA has been agreed upon and signed by both parties, it becomes a legally binding contract and sets the terms for the sale of the business.