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Valuations

Synstrat undertake practice valuations principally in the field of dental and veterinary practices. Practitioners may require a practice valuation for several reasons:

  • The preparation of finance or lease applications
  • Prior to a change in ownership status
  • As a legal support document for court proceedings

We value practices in an orderly manner, and in compliance with the APES 225 standard for Valuation Services. In arriving at a fair market value we rely on:

  • a regular flow of valuations throughout Australia over many years;
  • our involvement in the actual purchase and sale transactions of our clients; and
  • our regular measurement of their financial performance.

Through our client base, from having undertaken a large number of valuations, and after advising on a significant volume of transactions we have a thorough understanding of the key issues underpinning practice valuations in the dental and veterinary fields.

A critical component in the provision of valuation services is the independence of the valuer. For this reason we have chosen not to act as practice brokers, who are typically remunerated based on a commission derived from a percentage of the sale fee. This destroys objectivity.

We regularly value dental and veterinary practices throughout Australia. We rarely find it necessary to visit a practice but we do examine (in substantial detail) the financials prepared by the Practice accountant. We compare specific costs with our Practice database and seek information from our clients concerning the location and size of surrounding Practices, as well as a valuation on the premises if appropriate. Experience shows that we produce accurate valuations linked to the actual market.

We also offer a service as an Expert Witness in court hearings regarding the valuation of dental and veterinary practices throughout Australia.

Special information for valuations for divorce court proceedings

Professional people are not immune from relationship breakdowns and sometimes those involved are unable to come to agreement on the value of assets. Investments, such as superannuation funds, usually have a current value that is easily recognised, while the complexity of ascertaining a value for the intangible assets associated with practice valuation often cause disputes to run on.

Sometimes disputes are prolonged because accountants or other valuers (without having substantive knowledge of the practice market) place an unrealistic value on the practice. Parties will often shop around for a valuation, perhaps getting several and making a claim based on a value heavily biased toward their own interest.

When this occurs, we advise the parties to jointly appoint us to value the practice, whether by mutual agreement or court order. We will prepare a thorough financial analysis of the practice concerned, and calculate a fair assessment of its value, presented in a well-written report by an acknowledged specialist. Parties have a defined period of time to raise queries after which the valuation gains legal weight. It is our experience that this approach minimises legal and valuation costs for all parties whilst providing an equitable outcome.

Where both parties do decide to appoint their own expert, we observe that the other parties’ legal counsel rarely challenge our valuation. Most of the valuations that we see from external accountants and valuers have been distorted with little actual evidence or reasoning as to how the value was determined. When the opposing parties' valuer is confronted with a thorough, well-researched valuation, they often choose not to contest the matter further in court.

To contact us about our valuation services, click here.