There are a number of reasons to choose to SIL outside of the...

There are a number of reasons to choose to SIL outside of the two options you've outlined above. When you are a successful practice with revenue in excess of $1m options for selling your practice reduce, in terms of who can buy your practice. A dentist working outside of the practice will struggle to obtain finance for a high value practice that they don't currently work in due to the potential exit of goodwill with the existing practitioner.

Selling to an existing associate working at the practice can be an option however can create issues when looking to exit if the sale is via an initial partnership. For example selling 50% of a $1m revenue practice to an associate today, in 10 years later at retirement your business partner has no real incentive to pay market value for your share of the business, and can make life very hard if you look to sell elsewhere.

With the SIL model there is potential to see a benefit from uplift in practice value via the JVP, while taking away many stresses associated with the operation of practices.

In respect to price paid 5 x EBITDA is fairly standard for corporate acquisitions of practices, granted these usually have clawbacks and performance conditions. These work as the whip for the previous practice principals, SIL are using the carrot through the JVP profit share. Practitioners continue to have a vested interest in the performance of the practice.

They have not targeted any greenfield sites, for new practitioners. I would personally prefer they target poor performing practices with a view to turning over staff as required and investing in marketing to build the patient base. There is a far greater potential to see growth in poorly managed practices than in practice already at capacity through good management. Purchasing the latter is just buying additional revenue at a fixed cost.

I can't comment on where the acquisitions sit as either high flyers or bargains with growth potential, however it's really a moot point given the purchase price was 5 x EBITDA. The performance of individual practices dictated their purchase price anyway.

In respect to Mike's shares, he has established this idea and company over what I understand are the last few years. The shares weren't issued on the basis of his experience or as part of his appointment. The entire thing is his baby, so at listing he could push his allocation as far as the market would accept.

I remain very confident with the business model.