A strong market and a promising opportunity

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Posted by: Dental Design 16th August 2021

Paul Wilkinson

The Dentistry Show London will cover a wide range of topics designed to benefit dentists and their teams in today’s profession. Among those in the NHS & Business Theatre will be a session by Paul Wilkinson of Dental Elite, who will be offering some valuable insights into the current dental practice market alongside advice for anyone thinking about buying or selling in the near future.

Summarising what delegates can expect to cover during his session, Paul says:

“I will explore sales over the last twelve months and the driving forces of the market, as well as reviewing the recent goodwill report released by NASDAL alongside our own data. There are many similarities between the reports, but I want to discuss why some of our figures are so different.

“As with any practice sale or acquisition, it’s essential to understand the valuation process. I will, therefore, illustrate the numbers that matter in a valuation, and the numbers that don’t. To make the point, I will demonstrate two seemingly comparable practices –– and show why their valuations differed so significantly.

“The aim is to help potential vendors build value in their business and understand which numbers they should be paying most attention to, such as what operating costs have most impact on the business’ bottom line for the purposes of valuation. There will be some really interesting information for anyone looking to become a first-time buyer as well – the better you understand the entire process, the more prepared you will be for a successful transaction when the time comes. I will cover debt serviceability and what you should look for specifically, as well as how valuations are calculated, the main market drivers and the differences between owner operators and groups.”

This is likely to be a popular topic among dentists, given that the market is so buoyant right now. According to Paul, the pandemic has done little to change the number of practices going to market, with appetite for practices equally as unaffected – or perhaps even greater than pre-pandemic.

“There hasn’t been a major trend between the pandemic and a change in the type of instructions we’ve been receiving,” Paul continues. “Any apprehensions are usually the result of media influence and a perception of a slow market, but most dentists realise the complete opposite is true when they get in contact with us. It’s all about supply and demand and there is certainly still demand for practices – we have probably seen the highest number of new buyers in the market over the past 12 months than ever before. The rumoured changes to Capital Gains Tax from the Spring Budget did cause some concern, but as that didn’t come to fruition, the panic was quickly over.

“Moving forward, the UDA situation in Wales will need to be monitored carefully for any potential vendors or buyers, but the information available on this at present is limited and it’s too soon to understand the impact this will have on the market. EBITDA multiples have remained strong and steady across the UK over the past 6 months, so it’s more important to appreciate how these translate into market value based on business profit, rather than what the market is doing as a whole.”

With the market remaining strong, this might be the ideal time for dentists to consider a practice sale or acquisition. As always, planning is key – if you’re thinking about making a change, be prepared. Don’t miss Paul at the Dentistry Show London to find out more about the current lay of the land.