Although Summer has passed, it is now that things are really heating up in the dental practice sales market, but I fear it may be an Indian Summer before Winter sets in.
We have seen over the last year that;
The UK dental market is highly fragmented with around 15% of practices in the UK owned by corporate dental bodies, approximately 20% by multiple sites owners (2-19) and the rest owned by independents.
The Country’s largest dental corporate, once but no more, the World’s largest has been in its present ownership for considerably longer than normal PE time frames. We must all expect it to come to market soon.
Investors may see that as an opportunity to move into or consolidate in the UK in a big way or the market may see it as a rear-guard action off the back of some widely known trading difficulties to recover their money. If it takes that second view, then the price multiple achieved on exit may not be much more than they paid to get in over 8 years ago.
If that were to be the case, then many might think that the ‘bubble has burst’ and that is the market price correction I foresee coming.
With dental practice transacted values climbing so sharply (we have seen some practices reportedly sell at x11 multiples) the days of ‘doubling your multiple’ simply by the arbitrage of practice consolidation are already looking, to me, like the halcyon days of the past.
Irrespective of my prediction above, the reality is that today, there is;
So, what does this mean for the dental practice entrepreneur today?
They should be asking themselves;
If you decide you’d like to explore your current opportunities, then contact either Max or myself. We know some serious investors who are looking to speed up their growth plans, possibly due to some of the reasons I mention above.