Big money talks in dentistry
Private equity group Bridgepoint paid an eye-watering £185 million.
Even though this was 25% less than the asking price, it is hardly a sum that the ordinary high street dentist can find in the petty cash.
Since 2006, big money has entered dentistry and the chances of a hard-working dentist being able to own his or her own practice diminish by the week
The nostalgic memory of owning your own practice and developing a long-term relationship with your community will be a thing of the past.
Already nearly three quarters of dentists are associates not owners. Their contract is not with the NHS but with their bosses, sometimes a corporate sometimes another dentist.
How will it all end?
Oasis chief executive, Justin Ash, has made his plans clear. In a statement he said the company was 'strongly positioned for further profitable expansion'. It currently owns over 200 practices and the new owners, Bridgepoint, has said it will provide £60 million for further expansion.
Some see this as a game of 'pass the parcel' increasingly seen in the world of dental corporates. Private equity group acquires corporates, acquires new practices to increase turnover, sells at a profit a few years later. And so the merry-go-round continues.
The problem for the aspiring equity group is that, although they can boost turnover through new acquisitions they cannot increase profit. There are few economies of scale and few profitable sales to be made.
Dentists have always been able to make a reasonable living, but in company terms these are expenses in the firm if salaries, not profit. Sooner or later the owners will discover that corporate dentistry is a bubble. And history tells us that all bubbles burst.
Before then, in attempt to make a profit, corporates will be forced to employ cheaper dentists, either from the EU or UK trained graduates who are unemployed. Since the coming of direct access, they can also employ hygienists/therapists in many roles now done by dentists.
It is time that the BDA and other leaders of the profession woke up and smelled the coffee.