Dental Market Review 2024: all you need to know

What does dental practice ownership look like? How much are practices selling for? Who is buying them? The Dental Market Review 2024 is now out – we take a look at some of the key findings.

Put together by Christie & Co, the report said that 2023 was characterised by ‘a strategic shift towards divestiture, culminating in a 3.3% contraction in corporate ownership of practices’.

This divestment trend, it said, allowed for a transition of ownership, predominantly towards independent buyers. The sector continues to be largely independent, with 65% of practices owned by independent single or dual practices.

Dental practice ownership

Some key findings on dental practice transactions include:

• The UK dental market comprises approximately 12,344 dental practices, which is not dissimilar to figures in previous years
• There has been a dynamic shift in ownership, with the top four groups now managing approximately 12.4% of all UK practices, a decrease of 0.6% from the previous year
• The largest groups are Mydentist with 532 practices, Bupa Dental with 389, Portmandentex with 380, and Rodericks Dental Partners with 226.

Supply and demand for dental practices

• Transaction volumes surged by 150% in agreed transactions and exchanges during the latter half of 2023, and a 29% decrease in transaction timelines, with the time taken from offer accepted to exchange moving from 283 days before 2023 to 201 days in 2023
• Deals completed at an average of 13% above asking price and there was a year-on-year increase in the overall number of offers received, which soared by over 80% to approximately 600 in the second half of 2023
• Appetite for private or private-led mixed practices from small groups has remained consistent, at 38% of offers received in 2023 versus 54% of offers received in 2024
• The rate of completed corporate transactions declined by 9.8% in 2023, and shifted dramatically away from practices where the leading income was derived from NHS. Offers for this type of practice (NHS mixed or fully NHS) accounted for some 57% of offers, and in 2024 this has reduced to just 8%, with the balance of 92% of offers received focused on mixed private or fully private practices.

How is the profession feeling about dentistry?

Hearing from 35,000 dental professionals, the survey showed:

• Overall, more respondents feel positive about the sector than negative
• Over half of respondents feel there has been an increase in patient demand for NHS dentistry
• Two in five (40%) respondents feel demand has increased for high-end elective treatments
• General dentistry is perceived to be the likely core driver for private growth by those who work within it
• More than 60% of respondents feel there will be an increase in therapist-led NHS treatment
• More than half of respondents feel the changes made to NHS dentistry in April 2024 is unlikely to facilitate the delivery of NHS dentistry
• The majority of respondents feel dental service delivery will be improved as a consequence of the ORE (Overseas Registration Examination) entrance exams, offering additional access to dentists
• Three in five (60%) respondents feel digital dentistry is at the forefront of future growth
• Over half of the professionals surveyed plan to either buy or sell a practice in the next three years.

We spoke to Joel Mannix, head of dental at Christie & Co, to explain more about the findings and where he sees dentistry heading.

What are the key patterns we are seeing when it comes to dental practice sales?

‘So far in 2024, we’ve seen a noticeable uptick in new pipeline deals, showing that corporate entities are, once again, keen to strategically acquire. But it’s really the independent operators and small group markets that are shaping the future of UK dentistry. Most practices are still owned by private groups and individual practitioners, which speaks to the sector’s resilience and entrepreneurial spirit.

‘Interestingly, the view on corporate divestments has changed a lot. Despite previously being seen as “failed practices”, they’re now highly sought after, especially by independent working principals who can bring valuable local insights and are committed to nurturing the practices and their teams onsite. Christie & Co has been a big player in this shift, handling over 76 corporate divestments in the past year alone.’

By increasing the number of qualified dentists available, we can better meet the growing needs of both NHS and private dentistry, ensuring that patients receive timely and high-quality care.

Joel Mannix

Head of dental, Christie & Co

‘The impact of the mini-budget led many buyers to moderate or temporarily suspend their acquisition plans last year which was a sharp contrast to their aggressive growth in 2022. This resulted in a constructive and healthy recalibration of the market in 2024.

‘Pricing stability has been restored, signalling a new phase of equilibrium and resilience. Our findings show that the multiples of EBITDA, which had seen some erosion in prior periods, have now broadly stabilised.’

The Overseas Registration Exam (ORE) – how important is efficient overseas staffing for UK dentistry?

‘Efficient overseas staffing is important for UK dentistry, and the Overseas Registration Exam (ORE) plays a key role in this. According to our recent sentiment survey, 59% of respondents believe that the ORE entrance exams will enhance service delivery across both private and NHS dentistry services. Specifically, 36% of respondents feel that both sectors will benefit – among these, NHS dentistry is expected to gain slightly more than private dentistry.

‘Moreover, efficient overseas staffing will help alleviate some of the workplace pressures simply due to supply versus demand. By increasing the number of qualified dentists available, we can better meet the growing needs of both NHS and private dentistry, ensuring that patients receive timely and high-quality care.’

Is therapist-led NHS work the future?

‘According to our survey, there’s a strong belief that therapist-led NHS treatment is going to ramp up over the next year. More people strongly agree with this than disagree. hygienists and therapists, in particular, are quite optimistic about this shift, likely because of the nature of their work. They see a growing demand for NHS treatment and believe their services will play a big part in meeting this need.

‘In fact, the hygiene and therapist group thinks that over a third of the growth in NHS services will come from their contributions. This sentiment is shared across mixed and private practices, too. So, it looks like therapist-led NHS work could really be a big part of the future of dental care, helping to address the increasing demand for NHS services.’

What do you anticipate the market will look like over the next 12 months?

‘Over the next year, the dental market is looking positive, driven by more operators feeling optimistic than negative about the sector. Demand for all types of dentistry remains strong, even though high-end elective treatments might see a dip. Growth is expected to come from general dentistry and specialist services, especially hygiene.

‘After a market recalibration, we expect all buyers, with particular emphasis on independent buyers, to make significant moves in purchasing practices. Bank lending appetite is strong, and with improved access to finance and lower interest rates, operators are likely to invest more in their practices. This should help overcome previous barriers to investment and give operators confidence that their expansion and upgrade projects will yield good returns.’

To read the full Dental Market Review 2024 report, visit: www.christie.com/dental-market-review-2024.