This strategic opportunity will see Denplan strengthen its support, investment and involvement for its member dentists and in the future of private, preventive dentistry, ensuring that Denplan continues to provide the widest possible level of support to its member dentists.
Denplan will initially pilot the partnership programme with five Denplan member practices, acquiring a 50 per cent equity stake in the practice and becoming an equal partner, with the dentist retaining full clinical management of the practice. The equity stake that Denplan will acquire of these practices will be set up as a ring-fenced Denplan company. The new company – Denplan Partnerships Limited – will operate separately from Denplan to ensure that there is no potential for any conflicts of interest to arise.
Steve Gates, Managing Director of Denplan, commented: “Our strategy in launching a new partnership programme has been led by Denplan’s member dentists as it has become clear that for many of them, succession planning and retirement is an area that is taking an increasingly high priority. By piloting a new partnership programme, we believe that Denplan can play an active role in supporting succession planning for those individual dentists who are considering their clinical and financial future through to retirement.
“We believe that this partnership model will reduce the barriers to a new associate taking over a practice as we will also support the eventual transition to a new owner, who will acquire the dentist’s 50 per cent share of the practice. This programme will be revolutionary in ‘guaranteeing’ the basis on which the remaining 50 per cent of the practice will be valued, therefore providing real certainty to the dentists who participate. The partnership will also support the dentists in realising some of the financial benefits of running a successful practice immediately while continuing to take responsibility for the day to day management of the practice, clinical activity and patient care.
“With the growth in private dentistry expected to continue and increased acceptance of corporate involvement in the dental market, Denplan is well positioned to enter into these partnerships because we have strong relationships already in place, as well as a trusted brand. Since Denplan became part of Simplyhealth in 2011, there has been a huge amount of support and investment in Denplan to ensure that our member dentists continue to benefit from the unrivalled innovation, focus and support that helps our dentists run a successful and profitable practice. Entering the dental delivery market and creating this new partnership funding programme is the next logical step.
“We have identified a shortlist to select five pilot practices that we will be going into partnership with and over the next few months we will be making sure that the programme works for both parties. However, we believe that this unique model is scalable and we have ambitions to roll this out further, potentially to a significant number of practices during the coming years, making it an important element of the support programme that Denplan provides for practices. We believe the new partnership funding programme is an exciting initiative for our member dentists and they can be re-assured that the practice and goodwill they have built up over the years will continue with the security of Denplan as a stable partner.”
The announcement by Denplan that it is going to enter into partnerships with dental practice owners has been welcomed by NASDAL spokesman Alan Suggett who said the initiative could improve the value of private practices.
Based on a predicted growth in private dentistry, Denplan has formed a new company, Denplan Partnerships Ltd, which will carry out an acquisition programme, starting with five pilot practices in the coming months.
Denplan Partnerships Ltd will acquire a 50 per cent stake in dental practices where the principal is five-10 years from retirement and wants a smooth transition to retirement but also wants to retain clinical control.
Alan Suggett, media spokesman for NASDAL and a partner in specialist dental accountants UNW LLP, said the value of private practices was lagging behind NHS and mixed practices according to the latest NASDAL Goodwill survey. He commented: “Perhaps Denplan’s entry into practice ownership this will help nudge the market upwards to the benefit of private practice owners.”
He added: “We need more information on how the partnership would work. My first impression is that this is a great opportunity for private practice principals to hedge their bets, by selling half of their goodwill and retaining the other half. At the same time, it provides an excellent exit route for those who would prefer their patients to continue to be looked after at an owner managed practice.”