Demand remains for private and mixed practices across the UK – while the economic environment is leading to changing corporate portfolios.
This is according to the Dental Market Review 2023 by Christie & Co.
The report highlights that while conditions have been ‘increasingly challenging’ with the combined effects of cost inflation and increasing interest rates, long-term confidence in the dental market remains.
Key themes include:
- Dental market affected by increased interest rates leading to lower deal volumes in H1 2023
- Demand remains for quality private and mixed practices across the UK
- The changing economic environment and workforce challenges are leading to corporates re-shaping their portfolios through mergers and disposals
- Strong demand for lower-priced practices from new buyers entering the market
- Corporate activity is reduced compared with prior years, as dental corporates and groups adjust to increased running costs and a higher cost of capital
- Recruitment and retention remain the key operational challenges in the sector, although there is a greater sense of optimism across the profession that the supply of dentists in the UK is increasing
- Corporate and independent owners report strong patient demand.
‘There remains very little impairment in the dental sector as the profession benefits from strong demand and a consumer base that is more conscious of oral health than ever before,’ the report reads.
‘That may change, however, if patient spending and sector funding should decline at a time when the cost of living is increasing.’
The report found that there was a 2.2% increase in the average sale price from 2021 to 2022. This marks a smaller increase than from 2020 to 2021, which, according to Christie & Co, reflects the stabilisation of market dynamics after the significant uplift following the pandemic.
The dental market in the first half of 2022 was particularly active, with significant group and large individual transactions. Activity was also very strong in the latter part, as a number of the larger groups competed mainly for private and mixed practices of scale.
Christie & Co estimate that, in 2022, 430 dental practices were sold across the UK, excluding large corporate mergers. Major deals included the merger of the portfolios owned by Rodericks and Dental Partners, and the completion of the merger of Portman Dental and Dentex.
Now, 13% of the total dental practices in the UK are now owned by the four largest dental groups – Mydentist, Bupa Dental Care, Portman/Dentex and Rodericks/Dental Partners.
However, the report states that the dental sector remains ‘firmly independent’, with a high proportion of practices owned by private groups and independently working principals.
Paul Graham, head of Dental at Christie & Co, said: ‘Today, we present the culmination of our comprehensive research and expertise in our Dental Market Review 2023.
‘This is not just a report; it’s a lens into the future of the UK dental business sector. Drawing insights from key stakeholders, we’ve delved deep into the intricate dynamics shaping the sector’s landscape. Our findings underscore a robust, positive trajectory for the dental sector.
‘The resilience and agility demonstrated by industry leaders, even in the face of challenges, is truly commendable. We believe that the insights provided will pave the way for informed decision-making and strategic foresight.’
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