The information memorandum is the primary marketing document in a dental practice sale. Prepared by the broker using information provided by the seller, it is the formal pack released to qualified buyers after they have signed a non-disclosure agreement. Its purpose is to give serious buyers enough information to form a preliminary view on whether the practice meets their acquisition criteria — and enough detail on the financials to initiate early conversations with their lender.
The IM is not a legal document. It contains no warranties and no binding representations. Formal warranties are given later, in the sale and purchase agreement, once the buyer has completed due diligence and both parties have agreed transaction terms. The IM sits earlier in the process, at the top of the funnel. What it does is start the conversation — professionally, efficiently, and without exposing the seller to premature legal risk.
That said, a misleading IM creates its own risk. If material information turns out to be inaccurate — the UDA delivery figures are overstated, the associate team picture is presented as more independent than it is, the normalised EBITDA figure does not survive scrutiny — the seller faces a renegotiation. Not a legal claim under the IM, but a repricing conversation at the point when the buyer’s due diligence exposes the gap. These conversations are harder to manage at that stage, when the seller has committed time and costs and the buyer has leverage.
What a Dental Practice IM Contains
A professionally prepared dental practice IM is structured around a standard set of sections. The depth of each section varies by practice complexity, but the core components are consistent.
Executive summary. A one-page overview of the key commercial facts: location, practice type, headline financial metrics, asking price, and the EBITDA multiple implied. The executive summary is what a lender or DSO acquisition team reads first to decide whether to continue.
Practice overview. The physical and operational facts: location, number of surgeries, equipment (including principal unit ages and recent investment), patient base, patient list size, opening hours, and NHS/private split. Buyers use this section to assess premises suitability and operational capacity.
NHS contract summary. For NHS practices, this is the commercially most significant section. It sets out the contracted UDA volume, the UDA rate, the three-year delivery history, and — where relevant — a clawback risk indicator. A practice consistently delivering 98–100% of its contracted UDA allocation presents a clean contract section. A practice with shortfall years needs the shortfall explained clearly and honestly; a gap in the figures without explanation raises more concern than a shortfall with a documented reason.
Clinical team. This section sets out who is delivering the clinical income and how. It distinguishes between principal-delivered and associate-delivered UDAs, names the associates, and provides the staff schedule. This section is read closely by buyers and their advisers. The associate independence question — whether the income genuinely continues if the principal leaves — is assessed directly from this data. Do not overstate it. A practice where three associates deliver 80% of UDAs under their own performer numbers is a materially different business from one where the principal delivers 60% and two part-time associates cover the rest. Both can sell; neither should be presented as the other.
CQC summary. The current CQC registration status, the most recent inspection rating, and the date of the last inspection. An up-to-date Good or Outstanding rating is an asset. An adverse rating — or a section that notes no recent inspection — flags regulatory risk to every buyer who reads it.
Financial summary. The most technically demanding section of the IM. It presents three years of revenue and EBITDA, followed by the normalised EBITDA figure — the earnings figure after documented adjustments (personal costs extracted, one-off items removed, owner-related expenses added back). The adjustments must be documented individually, not presented as a single normalisation figure. Buyers and lenders both require the line-by-line breakdown to verify the normalised result.
Asking price and multiple. The headline consideration, the EBITDA multiple it implies, and the basis for that pricing (trailing twelve months, most recent year, normalised average across three years).
Transaction structure. The proposed deal structure — whether the seller requires a full cash completion, is open to earn-out mechanics, and what the timeline to completion looks like. For practices with an NHS contract, the expected timeline for NHS novation is noted here.
Reason for sale. Buyers ask this. A clear, credible explanation — retirement, health, relocation, career change — removes an obvious concern. Absence of an explanation raises it.
What Makes a Strong Information Memorandum
The financials hold up to scrutiny. The single most important quality in a dental IM is that the normalised EBITDA presented survives due diligence intact. Lenders make indicative credit decisions based on the IM EBITDA before due diligence begins. If the EBITDA established during due diligence is materially lower, the buyer’s lender may not proceed on original terms and the deal restructures or falls away. An IM that is accurate from the outset produces a smoother transaction.
The clinical team picture is complete and honest. Buyers who discover during due diligence that the principal is significantly more clinically active than the IM implied treat it as a credibility problem, not just a financial adjustment. Overstatement of associate independence is one of the most common sources of late-stage deal friction in dental practice sales.
NHS UDA delivery is transparent. Where there are shortfall years in the three-year delivery record, they are explained. A documented reason for a single shortfall year does not disqualify a practice. An unexplained pattern of underdelivery — or a UDA delivery section that smooths over historical shortfalls — creates the impression that there is something to hide.
CQC is current. A CQC inspection that is five or more years old concerns buyers even if the rating is Good. Compliance requirements have tightened; the market has moved. Sellers with dated inspections are better served arranging a mock inspection and addressing any gaps before marketing rather than asking buyers to take a view on an outdated regulatory snapshot.
How Buyers Use the Information Memorandum
Criteria fit. The buyer’s first question is whether the practice is within the parameters they have defined — geography, size, NHS/private split, price range. The IM executive summary answers this in a page.
Lender engagement. The IM is the first document shared with a dental acquisition lender. Before a buyer has committed any meaningful time to a transaction, they will typically seek indicative terms from a specialist dental lender on the basis of the IM alone. The lender’s response — how much they will lend, at what rate, and on what security — determines whether the buyer can fund the acquisition at the asking price. A well-constructed IM accelerates this assessment and prevents buyers from wasting time on transactions they cannot finance.
What an Information Memorandum Is Not
Not a data room. Clinical records, full staff contracts, lease documents, and CQC compliance files are not included and are not expected at IM stage. Those documents emerge during due diligence, after heads of terms have been issued and the buyer has confirmed intent to proceed.
Not a guarantee of asking price. The IM is the opening position. Whether the asking price is achieved depends on whether the information in the IM is validated by due diligence, whether the buyer pool generates genuine competition, and whether the transaction is managed well from offer to completion.
Not a substitute for professional advice. Sellers should not interpret the IM as confirmation that the practice will achieve the asking price or that the transaction will proceed on the stated terms. The IM opens the process; the heads of terms, due diligence, and SPA determine how it closes.
For a full overview of the process from instruction to completion, see our guide to how to sell your dental practice. For the methodology behind the financial figures presented in an IM, see our guide to dental practice valuation.
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Frequently Asked Questions
What is an information memorandum in a dental practice sale?
An information memorandum (IM) is the primary marketing document prepared by the broker and released to qualified buyers after they have signed a non-disclosure agreement. It sets out the practice’s commercial, clinical, regulatory, and financial profile in a structured format that allows buyers to form a preliminary acquisition view and initiate lender discussions.
Is the information memorandum a legally binding document?
No. The IM contains no warranties and no binding representations. Formal warranties are given later, in the sale and purchase agreement, once due diligence is complete and transaction terms have been agreed. The IM is a marketing document — but material inaccuracies in it create renegotiation risk when they are exposed during due diligence.
What financial information is included in a dental practice IM?
The financial section covers three years of revenue and EBITDA, followed by a normalised EBITDA figure supported by line-by-line documented adjustments. Asking price and the implied EBITDA multiple are also presented. Buyers and lenders both require the detailed adjustment breakdown to verify the normalised result before committing to a transaction.
When is the information memorandum released to buyers?
After the buyer has signed a non-disclosure agreement. The NDA confirms the buyer will not disclose the fact of the sale or the practice’s identity without the seller’s consent. The IM is released once the NDA is in place and the buyer has been qualified as a credible acquirer by the broker.