Quality of Earnings
Most dental M&A consultants do not recommend their sellers go through a quality of earnings exercise with a third party accounting firm due to the costs to the client. And they believe this exercise is redundant as the buyers side will always pay for this analysis. The problem with this approach is that once you’ve signed a letter of intent and you’re in due diligence, you might be disappointed with the buyer’s quality of earnings review that comes back with a significant decrease to EBITDA. This can blindside a seller with a significant decline in the evaluation of their practice.
Our team likes to go thru this exercise prior to executing a letter of intent so that we feel confident in the presented EBITDA that will withstand scrutiny in the buyer’s due diligence process. We have gone to bat defending our analysis against Big 4 accounting firms and know exactly what these firms are looking for in their approach. Our presale analysis is invaluable as our past clients will attest to. We know exactly what your practice is worth using the techniques that Big 4 accounting firms use but at a fraction of the cost Big 4 firms charge.
Having this analysis done prior to executing a letter of intent will give you confidence in executing the transaction at an evaluation you expect and deserve, eliminates surprises and miscommunications, and makes the overall process smoother even from the buyer’s perspective, many of whom will attest to the same.
Having this analysis done prior to executing a letter of intent will give you confidence in executing the transaction at an evaluation you expect and deserve, eliminates surprises and miscommunications, and makes the overall process smoother even from the buyer’s perspective, many of whom will attest to the same.