Despite challenges such as the cost-of-living crisis and geopolitical uncertainty, the dental sector continues to be attractive to investors according to Christie and Co’s recently-published annual Dental Market Review.
The ability of the sector to recover so quickly, relative to some other industries, following the pandemic meant private equity firms still viewed dentistry as a viable proposition for investment, as Christie’s head of dental, Paul Graham explained to Practice Plan’s sales and marketing director, Nigel Jones during their recent conversation.
However, most buying and selling activity appears to have been dominated by independents and groups (defined as having 22 sites or fewer), rather than corporates. There has been evidence of some bank financed groups employing a ‘buy and build strategy’ with the ambition of reaching a size that would attract private equity investment.
Although, as Paul explains, merely acquiring practices may not achieve that aim as there needs to be some substance behind the group to be able to attract private equity. A well-functioning existing management team, robust administration and management systems for the whole group need to be in place to be attractive to investors.
Good news
Following 13 years of growth within NHS dentistry values, although it may be too early to say, despite the unfavourable economic climate, there is no apparent decline in interest in NHS practices – yet.
Before the pandemic, private dentistry was accelerating in popularity and, despite the cost-of-living squeeze on household incomes, that is expected to continue.
The good news is, people still appear to be prepared to pay to maintain their oral health or have cosmetic dental treatments.
Despite the apparent gloomy economic prospects, dentistry remains a sector which offers opportunities to owners and investors alike. According to Paul, exploring your options with a broker could still prove fruitful.
If you’d like to work with a membership plan provider who thinks about your needs and supports your business, helping you to find solutions to the things that matter in practice, why not have a chat with Practice Plan on 01691 684165. To find out how easy it is to join Practice Plan, visit their website.
