By: Laura Bennett
Director of Marketing
Dr. Shane Blacker's story begins in the spring of 2004. Blacker was very aware that his graduation was quickly approaching in June 2005 from the University of Rochester's Eastman Dental Center. After graduation he had intentions of moving to Arizona to begin work. He researched orthodontic practices in Arizona in an attempt to locate a practice he could eventually purchase. He made calls to several orthodontists in the state and had lengthy telephone discussions with them and even met with several personally to discuss the possibility of him joining their practice to eventually become an owner or partner.
During the eight month period, Dr. Blacker contacted Dr. Paul Bonham's orthodontic practice in Tempe, Arizona. "I contacted his office in April of 2004 and met with Dr. Bonham for the first time in June of 2004." said Blacker.
Dr. Blacker was extremely impressed with Dr. Bonham and his practice because their treatment styles were compatible and their personality clicked. "I felt Bonham could be a great mentor to me. He had two offices with plans to significantly grow the smaller satellite office. The potential for growth and development within the practice was exceptional, and the practice was extremely profitable." said Blacker. "Bonham's long-term goals, his personality and his desire to construct a win-win scenario gave me confidence the transition would work."
After countless discussions and telephone calls, the deal was in the works. Bentson Clark was contacted to assist Blacker and Bonham work out an official buy-in scenario and partnership arrangement. A practice valuation was contracted by Bonham through Bentson Clark to determine the fair market value of the practice. The valuation took into account the practice location, number of patients, growth rate, charges/production levels, collections level, overhead rate, profitability and many other financial aspects of the practice. The valuation helped to determine a final sale price. "I first saw the valuation in February of 2005. We then signed the association agreement and intent to purchase in July 2005." said Blacker.
Before signing the agreements many hours were spent discussing the valuation with advisors, which included Bentson Clark and the doctors' personal accountants. After several rounds of discussions and negotiations, which included determining and agreeing on the business structure, buy/sell agreements and the financing terms and arrangements, Blacker and Bonham signed the letter of intent indicating both parties' intentions to enter into transaction. The final binding legal documents have been prepared based on the signed letter of intent and are scheduled to be signed in the beginning of 2006, at which time Blacker will officially buy into Bonham's practice and become an owner.
Though Blacker has not officially become an owner in the practice, he has been an associate at the practice since July 2005, and the terms of the deal have been agreed upon and documented with the majority of necessary paperwork having been prepared. His transition of being a resident to an associate happened only a month after graduation. Blacker describes his new practice in one word, "Amazing. Paul Bonham has an excellent practice, fine staff and is very business savvy, which is essential. His practice is very successful and I am looking forward to becoming his partner."
"The process took longer than I thought it would," Blacker said "but now I know there are many details in constructing such an arrangement." It is typically suggested to start looking for a practice or become actively involved with companies that match residents, like Bentson Clark, as soon as your residency begins. The longer a resident has to transition the less stress it can involve. Allowing extra time can be essential if any major problems arise during negotiations or if document preparation takes longer than expected.
It is critical that all parties involved in the transaction utilize experienced advisors to assist them in negotiating and finalizing the transaction. Blacker states, "Bentson Clark…does a great job of evaluating the practice and answering all the resident's questions - trust me there were many. They were very patient with me during the process. Bentson Clark does a great job of bringing all parties together to allow it to work and not force it. I would use them in the future."
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