Dental practice valuations rise while deals fall
NewsPosted by: Dental Design 1st February 2018
The latest Practice Goodwill survey from the National Association of Specialist Dental Accountants and Lawyers (NASDAL) has revealed that practice valuations have continued to rise while actual deals have started to fall. It also shows that valuations of NHS practices are commanding higher values than those that are private and mixed.
Ajay Patel, partner at Elan & Co LLP in London, said: “Dental practice acquisition and disposal remains buoyant in London and south east, despite the gloom and doom predictions for the new contract, increase in borrowing costs and capping of NHS pay.”
He added: “With high values I see high gearing and an over optimistic view by acquirers in their own ability to develop and grow the practice.”
“Many acquirers do insufficient financial due diligence work only to find out that they are burdened with a practice in which most of their income goes towards servicing loans and reinvestment.”
“High acquisition costs demand that any potential acquirer should consider carefully all financial aspects, not only for the acquisition but also some years after acquisition.”
NASDAL has reminded all that as with any averages, these statistics should be treated as guideline only.
