• Call now to discuss
    the first steps in selling
    your dental practice
  • 888-979-7925

Dental Practice Transition Articles

Browse the Categories

Thursday, July 8th, 2021 | by Kevin Cooper, MBA

Understanding the Offer to Purchase Document

Dentist signing a contract

Whether you’re buying or selling a dental practice, one of the most important initial documents is an Offer to Purchase (OTP). This signed document lays out the price, terms, transition, and real estate (if applicable) of a practice being sold. Recently, we’ve seen buyers increasingly use a Letter of Intent (LOI) to make the offer, especially when the buyer is a corporation or a DSO. When an individual dentist is the buyer, however, a simple, one-page offer form is often all that is needed to agree to the basic terms of the deal and move forward. A broker is prepared and can easily create a personalized OTP document for you.

Dentist shaking hands in front of dental chair

One page is more than sufficient to lay out the basics of the deal, including:

  1. Buyer’s name & address
  2. Seller’s name & address
  3. Assets being purchased
  4. Assets not being purchased
  5. Price
  6. Terms of payment
  7. Transition details
  8. Real estate (if applicable)
  9. Contingencies
  10. Anticipated settlement date
  11. Signatures

At this stage, regardless of the document that is used, from a simple offer form or a formal Letter of Intent (LOI), it is non-binding. The specific details will be worked out in the Asset Purchase Agreement (APA) by attorneys for both parties. The sooner the offer form is agreed to and signed, the sooner the buyer can secure financing, begin the credentialing process, give notice to an employer if necessary, and allow the attorneys to begin working on the APA and other contracts.

A formal LOI often goes into more detail than is necessary in the early stages of a dental transaction. Also, it often involves the attorneys at an earlier point in the process, which can slow it down and lead to unnecessary costs for both parties.

If you have any questions about how to structure an OTP, your ADS specialist is ready to help.

Kevin Cooper, MBA, is a Practice Broker with American Practice Consultants.


What a Practice Broker Can Do for You

In most life situations, people use specialists to help them obtain the help they need. People go to their dentists to obtain dental care. They go to a medical doctor to obtain medical care. They seek the services of insurance agents to help design an insurance program to meet their needs. They seek the help […]

Read More >

Keeping Your Credit Rating Clean

“I’m sorry, but we are not comfortable making the loan due to poor credit history!” Unfortunately, this is a comment I hear all too often from lending institutions when attempting to secure a loan for a practice transition. For the past 30 years, I have been preparing financing packages for dentists wanting to purchase a […]

Read More >
back-to-top-arrow