UK Dental Groups: A Market Overview
In this article for Private Dentistry, Tom Morley, Associate Director - Dental, outlines what a dental group is and the level of market appetite for such businesses.
A dental group is usually defined as a dental company that has three or more locations under one collective umbrella. In some cases, they will have unified branding across all locations however, some groups like their practices to have their own identities and not be known as part of a group.
They typically operate on a fully/partial Associate-led basis and, for these to be viable in the long term, would have an average minimum turnover range of between £800,000 and £1,000,000 per site. Dental groups can also operate on a national or a more localised level with some also incorporating their lab offering within the group to streamline their internal services.
Buyer appetite
Dental groups typically command larger asking prices, so buyers are often corporates, other acquiring dental groups, or private equity platform purchasers as, quite often for an individual, purchasing a group can be out of reach financially.
Groups are always sought-after and will be considered nationwide, however, where a group operates predominantly in more rural areas where recruitment can be a challenge, you may find that the buyer pool narrows. Groups that are established in major urban or market town locations tend to be the most sought-after within the market.
What to consider if you’re thinking of selling your group
The sale of a dental group is often complex, especially where you have multiple locations and large numbers of staff, so accurate financial modelling is paramount. It is always advisable to engage with a reputable agent to assist in the initial appraisal and eventual marketing of the opportunity.
If you’re looking to sell a group, it is important to seek advice on the right target market as some groups will have a predominantly NHS focus as opposed to some having a mainly private or indeed specialist focus, so targeting the correct buyers is key to achieving the best results when navigating the offer process.
Some corporate operators inform their targeted groups that they are the ‘only buyers for this opportunity’ attempting to stifle competition but, in our experience, this is not the case. Approaching a multiple buyer pool leads to competition from purchasers, allowing the seller to make an informed decision from multiple competitively achieved offers.
Group opportunities, though they can be few and far between, are sure to attract considerable interest. In our experience of handling some of the largest dental sales in the UK, the information must be presented clearly, professionally and in a manner that potential buyers would expect. This will make the sale process much smoother and hopefully, by eliminating anomalies in financial due diligence, will avoid a potential price reduction mid-way through the process.
For a confidential chat about your dental group, contact Tom Morley: tom.morley@christie.com / 07540 063 172
