Dental practice valuations keep falling

goodwillGoodwill valuations and deals have dropped in the last quarter, according to the latest NASDAL goodwill survey.

Figures show goodwill valuations have dropped for both NHS and private practices.

NHS goodwill valuations dropped to 177% of gross fees, while private valuations dropped to 104% of gross fees.

‘There are still a number of issues in the UK dental practice sales market,’

‘Although there has been a drop in both valuations and deals,’ Alan Suggett, specialist dental accountant and partner in UNW LLP who compiles the goodwill survey, said.

‘I would want to see the next quarter’s figures before deciding on whether or not this is a trend or simply a blip.

‘Geography is a consistently important factor.

‘It is simply more difficult to sell practices in certain areas of the country.

‘I have also heard that a lack of availability of associates is causing some NHS practice owners to worry about hitting targets.

‘This may be related to Brexit and it will be interesting to see what effect this may have on the market.’

Demand strong

Christie & Co has predicted demand for dental practices to remain strong throughout the next year.

Launching its ‘Business Outlook 2019: Navigate, Innovate, Accelerate’, the practice sales agent reported a 5.2% growth in the dental sector in 2018.

This growth has dropped from 12.3% in 2017.

‘Last year was another strong year in the transactional market,’ Simon Hughes, managing director – medical at Christie & Co, told

‘Although price increases were more moderate than in previous years.

‘We expect 2019 to be equally good with a better supply of dental practices coming onto the market.’

Valuations plummet

Over the past year practice valuations have plummeted from a high of 153% of gross fees.

The percentage of deals carried out has seen a more gradual decline, dropping from 137% of gross fees.

‘There is ever increasing private equity interest in acquiring larger practices, or small groups,’ Alan concluded.

‘A new entrant to the market is Apposite Capital, which has invested in “Riverdale Healthcare”.

‘They recently bought the “Alpha Vitality Group” in the north east.’

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