Page 20 - Traditions Policies and Procedures

1005 – Exit Strategy

The exit strategy and number of options will likely evolve and improve
as we achieve higher levels of success. The timing and price will depend
on many different factors that are very hard to predict. The below
strategies are big-picture ideas based on current plans.

STRUCTURE:

 Practices sold as a group.
 Net profit divided among founders as written in Shareholder Agreement
 Outright purchase to avoid owner’s having to re-enter ownership
 Founders own personal practices included in group sale if:
o Financially more feasible for that founder vs. selling separately.
o Matches personal exit strategy for that founder (personal vs.
financial readiness)
o Management structure matches the group to improve sales
price
o Total purchase price as multiple of net is maintained or
improved for the group.
o Buyer prefers to have the founders’ personal practices included.

PRICE:
 10 times combined net income for all practices.
 $75 million purchase price ($150,000 net/practice X 50 practices)
 No limits: Could be $1 billion or more.

TIMING:
 5 years (2023): $75 million purchase price:
o 50 practices X 15% net
o $18.75 million per founder
 15 years (2032): $750 million purchase price
o 500 practices X 15% net
o $187.5 million per founder

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