Practice purchase & sale
Practice valuation, sale preparation and buy-side due diligence
Whether you are selling, buying, bringing in a partner or thinking about a corporate exit five years out, the valuation work is the same: normalised EBITDA, goodwill methodology, asset list, contract review, tax structure. The right number is the one that holds up under buyer due diligence.
How dental practices actually get valued in 2025/26
There are two common methods. Earnings-based valuation multiplies normalised EBITDA by a sector-and-region-specific multiple. Percentage-of-fee-income applies a percentage to the gross fee income. Some buyers use a hybrid.
EBITDA multiples in UK dental in 2025/26 typically range from around 0.6× for NHS-heavy single-handed practices in low-demand regions to 1.4× or higher for private-focused multi-surgery practices in high-demand regions. Corporate buyers benchmark differently again. We model both approaches and reconcile.
Goodwill typically represents 60-80% of the total practice purchase price. Tangible assets (chairs, lights, X-ray, compressors, sterilisation) make up the balance.
Normalising EBITDA before the buyer does
Buyers will normalise the seller's EBITDA. They will strip out the principal's drawings (replacing them with market-rate principal cost), the practice manager who is actually the principal's spouse on above-market pay, the personal expenses that ran through the business, the one-off goodwill amortisation from a previous buy-out.
We normalise first, so the seller knows the realistic figure and the buyer is not the one delivering the surprise. Common normalisation adjustments:
- Replace principal drawings with market-rate principal salary + dividend equivalent
- Adjust spouse salary to market rate for the actual role performed
- Strip out one-off items: COVID restart, equipment refresh, premises buy-out costs
- Add back amortisation of goodwill from previous acquisitions
- Strip out personal use items (vehicles, subscriptions, family-related expenses)
- Normalise rent to open-market value if the principal owns the premises personally
Tax planning before a practice sale
BADR (Business Asset Disposal Relief) is the lever that matters. For 2025/26 disposals it gives 14% CGT on qualifying gains up to a £1m lifetime limit. From 6 April 2026 the rate rises to 18%. A practice sale completing the day before vs the day after that date is materially different on the tax bill.
BADR eligibility requires two years of qualifying ownership, employment or officer status, and the qualifying-asset tests. We check this 24 months out, not in the week before completion. If the structure is wrong, fixing it usually takes 12 months minimum because of the two-year qualifying period.
If you are still unincorporated, Section 162 incorporation relief can defer CGT on goodwill when you transfer the whole unincorporated trade to a company in exchange for shares. This is sometimes a sensible move before sale, sometimes not. We model it.
Buy-side: what to ask the seller before you sign
Most buy-side first-time dental practice buyers see one practice they like, get attached, and skim the diligence. We see the second deal go better than the first because they ask the right questions the second time. We bring the second-time approach to first-time buyers.
- Three years of accounts plus the latest management accounts
- NHS contract documentation, including the most recent UDA reconciliation and any contract variation letters
- Associate agreements (all of them, current and recent past) with the fee splits and notice provisions
- Lease or freehold documentation, with planning consent for D1/E-class use
- Equipment inventory with age, service records and remaining useful life estimate
- Patient record system audit (PMS export, recall compliance, treatment plan completion rates)
- Compliance documentation: CQC registration, CQC inspection history, radiation reports, employment contracts, GDC registrations of all clinical staff
Frequently asked
- How long before sale should I start planning?
- Realistically 24 months. BADR eligibility hinges on two years of qualifying conditions, and pre-sale normalisation work (taking spouse salary back to market rate, cleaning out personal expenses from the P&L, regularising associate agreements) needs at least 18 months to show in the accounts that the buyer will see.
- What's the difference between asset sale and share sale?
- Asset sale: the seller's company sells specific assets and goodwill to the buyer. Share sale: the buyer acquires the seller's company outright. Share sales are more buyer-friendly on stamp duty (0.5% on shares vs SDLT scale on practice premises) but more seller-risky because hidden liabilities transfer with the company. Most UK dental sales settle as asset sales for that reason. We model both structures against the buyer's preferred approach.
- What multiple should I expect on EBITDA?
- Range, not a single number. In 2025/26 UK dental, NHS-heavy single-handed practices in regions with low buyer demand can sit at 0.6×-0.8× normalised EBITDA. Private-focused multi-surgery practices in high-demand regions (London, South East, prime South Coast and West Country) can reach 1.4× or higher. Corporate buyers will pay a premium for fit. Quote a single multiple and you will mis-set expectations on either side.
- Do you handle the legal side of the sale?
- No, that needs a dental specialist solicitor. We work alongside them, providing the financial work (valuation, EBITDA normalisation, tax structuring, post-completion reconciliation) while they handle the contract, completion accounts and legal due diligence.
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Get the valuation right before you list
A pre-sale review 18-24 months out is the difference between hitting your number and accepting the buyer's. Book a 30-minute scoping call.
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