Continued investor appetite and a lack of quality opportunities have led to many different buyer categories competing fiercely in the dental arena. Below we review the various buyer types currently in the market.
Independent buyers are usually bank funded but likely to be supported by family money. First time buyers in particular are likely to be the most aggressive on pricing and will often ‘top up’ their offer beyond the valuation to secure a sale. They can look at the opportunity as an owner-operator which not only maximises profitability but also guarantees them an income.
Multiple practice owners are typically flexible. Whilst often still bank funded they will have good relationships with their lenders and advisors meaning transactions happen quicker. They are driven by the opportunity and will often not be restricted by geography.
Corporate operators do not tend to rely on bank funding and therefore offer sellers a quick route out of practice ownership. Whilst they will often look to tie the Principal in for a period of time, they are typically well structured and offer good post-sale management support to the seller and their staff.
We are continuing to see increasing levels of private investment in the dental sector for larger practices and groups. This can be an attractive option for sellers due to the cash funds available. The high returns and relatively low impairment levels of dental practices provides a sound investment for private equity houses.
The only way to guarantee that sellers receive the best price for their practice is by inviting parties from each buyer category to offer on a competitive basis. At Christie & Co we don’t restrict who looks at your practice by having a list of ‘preferred buyers’, we generate multiple offers from our large database, from which the best bidder can be chosen and optimum terms agreed.