What to expect when buying a practice
Each practice transition is structured a bit differently, but here are some of the basics about what to expect when buying a practice through ADA Practice Transitions.
Evaluate Recommended Matches
After your profile has been submitted and approved for matching, your ADA Advisor will select practices they recommend based on all the criteria you entered into your profile. You will receive email notifications that you have practice suggestions waiting for you. Review these recommendations on the ‘Match’ page within your profile. If you see one that you would like to evaluate more closely, choose to connect. At that point your profile (in a limited format) is recommended to the owner of the practice to evaluate
If your profile is of interest to the practice owner, either of you can reach out to schedule a 15 minute phone call. The purpose of this introduction call is to learn a little more about each other and the practice.
If you agree to have a more in depth discussion regarding the operations of the practice, a signed NDA (non-disclosure agreement) will be exchanged. This document simply precludes you both from discussing any of the purchase details to anyone who is not directly involved in the transaction.
Evaluating the Practice
You will be guided through evaluating the finances and operations of the practice as you decide whether or not to make an offer. Your accountants and finance representatives will assist you in making the final decision. Don’t have a necessary resource? Let your ADA Advisor know and you’ll receive assistance and guidance on finding the right resource for you.
Letter of Intent
The next step is the Letter of Intent (LOI). The LOI will set the stage for the rest of the process and should be carefully considered. Your ADA Advisor will provide expert advice and guidance to ensure you are hitting all the pertinent points and to get you ready to review the LOI with your attorney.
This phase typically takes 60-90 days and can be equated to the home inspection when buying a house. You’ll have access to an ADA Practice Transition due diligence checklist as your guide during discovery. During the due diligence process, you may find that you require additional assistance from the seller; your ADA Advisor will guide you as you work with the seller and the bank to hammer out all the details.
Asset Purchase Agreement
Next, it is time to draft the final Asset Purchase Agreement (APA). Do not worry, if you have a strong LOI and have been in communication with the seller throughout the process, the APA will be a piece of cake! Your ADA Advisor will assist you in making sure you have all the documents reviewed by your attorney before delivering them to the seller.
Prior to the Closing, your ADA Advisor will create an Integration Plan tailored to your specific transition. This step-by-step plan will act as your guide to transitioning into your new practice, ensuring the practice keeps running smoothly throughout, and long after, the papers are signed.
Once the APA is accepted by both parties, it is time for the closing. You will generally meet at the finance institution or lawyers office but the closing can occur anywhere. You will be delivering a large sum of money to the seller and the funds will be dispersed according to the terms outlined in the APA. The final documents will be signed and the keys will be turned over – congratulations! You are now a practice owner.