Feb 6, 2023

Five Reasons Why Dental and Healthcare Mergers and Acquisitions Are on the Rise

There are currently almost 12,000 dental clinics in the United Kingdom. Unlike in many sectors, most dental practices are independently owned. A small percentage are owned by small companies operating fewer than 22 sites, and just 13% are operated by a very tiny handful of larger corporations.

The dental industry is changing. In the last couple of years, there has been a growth in demand for acquisitions, with many independent practices seeking to merge with other clinics.

While there are obvious benefits to growing a business in this manner, including acquiring an existing patient base, building a brand, and diversifying the practice’s offer, but you may wonder why we’re seeing this a sharp increase in mergers and acquisitions now.

Here are five of the key reasons why dental and healthcare mergers are currently on the rise in the UK and why now might be the perfect time to grow your business.

1. Post-COVID-19 Demands On Dental Clinics

During the peak of the pandemic, dental appointments and treatments were scarce. The regular flow of activity at most practices was reduced to a trickle, with clinics mostly only handling emergency procedures during this period.

As we moved out of COVID restrictions, patients started returning to clinics for routine checkups, essential treatments, and cosmetic procedures in abundance. This led to increased demand for dental services practices. For some practices, scaling up through mergers and acquisitions is one way to meet this demand.

2. Increased Organic Demand for Dental Care

Alongside COVID-19, there’s been a shift in attitudes toward dental care driving organic demand. While some of this may, in part, be due to a post-pandemic change in mindset with people wanting to improve their general health and well-being, influencer-driven social media is also a key component.

Instagram, TikTok, and reality TV shows are driving demand for cosmetic procedures like teeth whitening, straightening, and dental veneers, as well as non-surgical facial aesthetics. Again, mergers and acquisitions offer the synergy needed to provide these services at scale.

3. Demand for Private Care Is at an All-Time High

NHS dental services have always been in high demand; however, several factors play into the fact that many patients cannot get access to NHS checkups and treatments.

The financial inviability of clinics offering NHS care, staff shortages, and the knock-on inflated waiting times mean patients increasingly turn to private treatment to meet their dental needs. Again, mergers and acquisitions help existing practices keep up with the demands of their growing private patient lists.

4. Treatments Are Becoming More Profitable

Along with the increased demand for more complex and higher-priced treatments, many clinics are increasing their costs.

As clinics yield greater profits, this provides the perfect fuel for growth. Many owners understand mergers and acquisitions provide the easiest and safest route to becoming a multi-site practice while adding synergy and value to their existing business.

5. M&As Offer a Viable Alternative to Squat Practices

Changes in planning laws in 2020 have made it easier than ever for dentists to fly solo and open their own squat practice. Squat practices provide the opportunity for dentists to set up the clinic they want to run. For these reasons, dental squats are on the rise.

But opening up your own practice from scratch involves sourcing equipment, finding and renovating a clinic, hiring a team, building a brand, bringing in patients, and much more. All of these things take time and money, and for the solopreneur dentist on their first venture, this often raises too many challenges that could impact the quality of care they deliver.

On the other hand, buying an existing practice is a great way for a dentist to become a first-time business owner. Not only will they skip all of the expensive set-ups, but they will have greater security and can still put their stamp on the business once they own it.

Discover the Benefits of Dental Mergers and Acquisitions First-Hand

At Pluto Partners, we help dentists grow their businesses through mergers and acquisitions. If you’re interested in finding out more about the benefits, get in touch today, and we’ll guide you through the entire process.

Dr Dev Patel
CEO, Dental Beauty

Max is able to secure high quality practices/groups by building unique relationships with sellers. His preparation of sell side materials is one of the best in the market. Highly recommend Max and Pluto when looking to sell your business

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