Are Dental Practice Values falling?

Back in 2007 I was heading the Merger and Acquisitions campaign for a growing dental body corporate. Our acquisitions pipeline had an average deal completion price of 104% of turnover.

We grew the business from 80 to 132 practices in 3 ½ years, until merging the business with a larger corporate in 2011.

In the following years, across all groups, the average deal completion price compared to the percentage of turnover grew to around 160%. In the last year our average sales prices at Samera Practice Sales was 148%.

Prices have peaked

We feel that prices have peaked this year and are already showing signs of dropping in the remainder of 2017.

Corporate slowdown in buying activity, recruitment issues and the Brexit effect on European dentists (17% of GDC registered dentists) seem to be some of the major issues.

However, in the last 6 weeks alone we have talked to at least 6 new dental groups coming together, forming to pursue a buy and build project.

Dental groups will pay top end prices

These new groups are prepared to pay the top end of the price range for their initial buy and build projects.

Whilst we are working with some of these groups, we are also working with many individual Associate Dentists seeking to acquire their first practice.

Associates – Dental Associate Buyers Service

Through our Buyer Registration service, we are helping Dentists identify practices to buy, securing the purchase and then helping them fund them. We have a growing number of Associates joining this service.

Practice Owners – Is it the right time to sell?

Are Dental Practice Values falling?

Although confidence remains relatively high, we do feel that valuations are on a downward trend hopefully not to the levels of 2007!

So if you are considering an exit in the next few years, we feel it is prudent to get organised now, as in many of the deals we are currently structuring our selling clients are locking in their value now.