Dr. Hugh Flax and the Deal that Never Was
For over 25 years, Flax Dental has been a successful business built on excellence in quality care. Dr. Hugh Flax is nationally known through his speaking and has been a contributing commentator on MSNBC, ABC, USAToday and Good Morning America. He’s even served as President of the American Academy of Cosmetic Dentistry, accumulating eight times the annual requirements for continuing education, while developing a staff with a commitment to excellence and learning.
CHALLENGE:
In late 2015, Dr. Hugh Flax and Flax Dental were at a crossroads. While he pursued excellence within the office, outside the office was a different story. Flax Dental’s office had been in the same location for over 20 years. The building was remodeled, but the infrastructure was poor and he constantly had patients complaining—not about care, but about the parking or the elevators. From a business perspective, it was time for the suit to match the man.
Flax Dental engaged Dudley Thomas Spade SRE (DTSpade) to find and negotiate space that met Flax Dental’s needs. It had to provide the visibility to patients, proximity to medical professionals, pricing and a professional image to match the practice. If we could meet those conditions, everything was on the table.
By February of 2016, we had sifted the market, evaluated proposals and had a grasp on availability in the market. There were three options:
- A condominium purchase that would have been capital intensive and didn’t quite meet all the criteria,
- a leased space in an A+ medical office building that would have increased operating expenses, but met all other points, and
- a merger/acquisition with another practice in the same A+ medical office building.
STRATEGY:
As much as we would have loved to place Dr. Flax in a new space situation, the third option ultimately made the most sense for Flax Dental. Space was built out with patients in place and gave him an opportunity to cherry pick the best of each practice.
“There was a little trepidation when it became apparent that the acquisition was viable. We’d learned a lot about the market from DTSpade—what was a good deal and what wouldn’t work. I wanted to do what was right for them, considering the time they had invested, but I had to do what was right for my practice, too.” -Dr. Hugh Flax
“This wasn’t even close for us. Once I got the details, I knew that Dr. Flax had found a unicorn: existing patients in a building that he liked on a reasonable timeframe. There wasn’t a way for us to commission that transaction, but chasing commissions aren’t how we’ve built a business. We’re known among physicians for finding and supporting them with creative options that aren’t necessarily the best options for us.” -Bryant Cornett
SUCCESS:
The acquisition wasn’t perfect—staff integration would require time. And reconfiguration of the space would be expensive without a Landlord contribution toward tenant improvements (TI). But in the end, the additional patients more than made up for the cost of the TI.
Today Flax Dental and its own brand of excellent dental care is stronger and has more capacity than in 2015. There was no commission for DTSpade, and we couldn’t be happier. In the end, we are strong when our Clients are stronger so we never have to imagine our city without Flax Dental.