First acquisition or fifth, NHS or squat — the practices that look best in the sales pack are rarely the best deals. We check before you commit.
Most buyers view a practice, picture themselves in it, and only then look hard at the accounts. By that point the emotional decision is made and the numbers become something to justify rather than test.
We flip the order. Before you offer, we rebuild the practice's earnings from the raw information: what the principal really takes clinically, what an incoming associate would actually cost, whether the UDA contract is being delivered or quietly clawed back, and how much of the goodwill walks out of the door with the seller.
Building from scratch trades goodwill cost for ramp-up risk. We prepare the business plan and cash-flow model lenders expect, help you size the borrowing honestly, and track the build-up monthly — so an empty diary in month three is a data point, not a panic. The squat practice guide sets out the full build, equipment and cash-flow sequence.
Sales packs quote an adjusted EBITDA and a multiple. The multiple is negotiable and everybody argues about it; the adjustment is where the money genuinely is, and almost nobody argues about it because almost nobody re-does it. Here is what re-doing it looks like on a real-shaped deal. The figures are illustrative, but every correction below is one we make routinely.
Four corrections, in the order we make them:
Rebuilt EBITDA: £151,700. At the same five times multiple, that supports £758,500 — a gap of £316,500 against the asking price, on a practice where nothing was hidden and nobody lied. The pack was simply prepared to sell, not to be bought from. This is also why the multiple argument is usually the wrong argument: a point on the multiple is worth £151,700 here, while the adjustments were worth twice that.
You can run your own first pass with the practice valuation calculator, and the valuation guide explains what genuinely moves a multiple as opposed to what brokers say does.
NHS contract performance is not a sliding scale. Deliver 96% or more of your contracted activity and the undelivered part carries forward into the next financial year. Fall below 96% and the commissioner recovers the value of what was not delivered, and nothing carries forward. The step between those two outcomes is what catches buyers.
On rebuilt earnings of £151,700, that £28,800 is nineteen per cent of a year's profit. And because reconciliation lands after the year end, it can be recovered from you for a period the seller was running. That is why we ask for three years of year-end reconciliation statements, not three years of accounts — the accounts show the income, the reconciliations show the shortfall. Our note on the UDA clawback trap in practice purchases covers how to apportion the risk in the sale agreement rather than absorb it.
The contract a buyer inherits in 2026 is not the contract that produced the seller's accounts. Urgent care no longer pays 1.2 UDAs per course. It now pays £75 per urgent course of treatment, converted to UDAs at the contract's Monetary Value of a UDA — the contract value divided by total UDAs, excluding sedation and domiciliary services. Contractors with a Required Number of Urgent Treatments receive £15 of that as a fixed monthly credit plus a £60 activity payment; others receive the £75 as activity payment alone.
The Required Number is set nationally at 8.2% of Relevant Contract Value — roughly 11 urgent courses of treatment for every £10,000 of contract value, rounded up, for contracts of 100 UDAs or more. On the £480,000 contract above, that is about 528 urgent courses a year, and if urgent care delivery drops below 30% at the mid-year point the commissioner can act. Alongside this sit Complex Care Pathway payments tariffed between £293.40 and £732.47, credited monthly against declarations, and denture modifications claimed as two UDAs on a Band 2 FP17.
None of that is visible in a 2025/26 profit and loss account. Before you offer, ask whether the practice's urgent care capacity and appointment book can actually meet the required number, and what the new payment mix does to monthly cash rather than annual income.
You can do most of the damage-limiting work before you spend a pound on lawyers. Ask the broker for these five, in writing, and read them in this order:
Send us those five and we will tell you within a few days whether the deal is worth pursuing. The full acquisition guide walks through the rest of the process, and the practice loan calculator lets you test the borrowing at the rate you have actually been offered.
Private and mixed practices are usually valued on a multiple of adjusted EBITDA; predominantly NHS practices are often discussed as a percentage of annual contract value. Neither number means much until the adjustments are tested, because that is where the price is actually set. The three that move it most are a realistic cost of replacing the principal's own clinical days, associate percentages at the rate the market will actually accept rather than the rate the outgoing owner negotiated years ago, and add-backs that turn out to recur every year. On a practice billing under a million pounds, correcting those three routinely moves the defensible price by several hundred thousand. We rebuild the earnings from source before you rely on the broker's version.
Financial due diligence should test UDA delivery against contract for each of the last three years, the year-end reconciliation statements rather than just the accounts, clawback actually suffered, associate and staff cost sustainability, plan income and attrition, and fee income analysed by clinician so you can see how much of the goodwill walks out with the seller. It should also cover equipment condition and finance agreements, the lease or freehold, CQC and compliance history, and employment status of hygienists and therapists. From April 2026 it must additionally test whether the practice can meet its Required Number of Urgent Treatments, because that is now a contractual commitment with its own payment consequences. We run this as a structured review with a plain-English report.
Dentistry remains one of the most fundable professions in the UK, and mainstream and specialist lenders compete actively for dental acquisitions, often at high loan-to-value and over terms of ten to fifteen years. What varies is the price and the conditions, and both respond to the quality of the pack you present. Lenders want rebuilt earnings they can believe, a cash-flow forecast that survives a stress test, and evidence you have thought about what happens if the outgoing principal's patients do not all stay. With the base rate at 3.75% following the Bank of England's hold on 30 July 2026, the affordability test is less punishing than it was, but it is still a test. Preparing that pack is part of our service.
A squat avoids paying for goodwill, and in exchange it buys you a build cost, a fit-out, equipment finance and a long ramp-up on an empty list. The trade is cash certainty for capital cost: an acquisition generates income from week one and services its debt from day one, while a squat burns cash for months before it covers its own overheads. Neither is safer in the abstract. What decides it is your appetite for the ramp, your access to working capital beyond the build budget, and whether there is genuinely unmet demand where you want to be. We model both routes side by side, month by month through the ramp-up, so the choice is made on cash flow rather than instinct.
Yes, and it is the reason last year's accounts should be read carefully. From 1 April 2026 urgent care no longer pays 1.2 UDAs per course. It pays £75 per urgent course of treatment, converted to UDAs at the contract's own Monetary Value of a UDA, with £15 of that arriving as a fixed monthly credit for contractors that have a Required Number of Urgent Treatments. That required number is 8.2% of Relevant Contract Value — about 11 urgent courses for every £10,000 of contract value, rounded up. Complex Care Pathway payments, tariffed between £293.40 and £732.47, are credited monthly against declarations. A 2025/26 profit and loss account tells you what the old rules paid, not whether this practice can deliver under the new ones.
Send us the sales pack and we'll give you a fast, honest first appraisal — what the numbers really say, and the questions to ask before anyone instructs a lawyer.
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