Paul Graham shares his insights on how the coronavirus pandemic is impacting the dental sector at the moment. He also looks at what this means if you’re looking to buy or sell your practice.
The Chancellor Rishi Sunak, was recently quoted saying that the UK government is delivering ‘unprecedented measures for unprecedented times’. It pleases me to see the volume of measures he and the government are introducing to support businesses.
It’s important to acknowledge the truly unprecedented nature of these times. We’re all considering how owners of dental practices need to adapt during this period. We hope, therefore, that practice owners, clinicians and support staff can draw support from NHS England, Scotland, Wales and Northern Ireland, as well as financial support from the government help schemes and policies, namely, the Job Retention scheme, deferred tax payments, the Coronavirus Bill, Coronavirus Business Interruption Loan Scheme and the Self-employment Income Support Scheme.
Reasons to feel optimistic
It’s understandable for this to feel completely overwhelming for practice owners. However, it’s important not to lose sight of some salient points;
- There is a reinvigorated collegiate spirit among the profession that we will overcome this
- We consider the dental market to be robust, often referring to it as a safe haven for investors
- Encouragingly, even in the current climate, we’re still seeing a degree of confidence and optimism; existing deals remain ‘agreed’ and these will complete in due course
- We are receiving new deals and offers on existing stock. After a period of settling the appetite from buyers will not dissolve
- We have, on good authority, that key banks remain very supportive in the sector, particularly for NHS based practices.
While some of the larger dental groups may decide to pause aggressive acquisition programs, approximately 80% of Christie & Co practice sales since January 2019 were to independent purchasers. There are more than 10,000 independent practices in the UK so we expect no decrease in supply of businesses for sale.
Understandably the market will have a period to calibrate as ‘normality’ returns, and when it does, we will again begin to see;
- Rapid expansion by smaller regional dental groups
- Corporate consolidation for the top tier of practices
- Private equity investment in the sector
- Banks readily supporting buyers.
The above has historically led to over five consecutive years of average price increases in sales so, despite the current unprecedented situation, we don’t expect to see this appetite change once the crisis is over.
In the meantime, our UK dental team is still on hand to provide advice. Despite physical visits to practices now being impractical in the short term, we are more than happy to conduct ‘desktop appraisals’, providing you with the same detailed report, but without risk.
We are also offering video call meetings in order to give clients and prospective clients greater comfort during these unprecedented times.
All other relevant guidance from NHS England and NHS Improvement on dental care in England is here.