Demand remains for private and mixed practices across the UK – while the economic environment is leading to changing corporate portfolios.
This is according to Dental Market Review 2023 by Christie & Co.
The report states that while conditions have been ‘increasingly challenging’ with the combined effects of cost inflation and rising interest rates, long-term confidence in the dental market remains.
Key topics include:
- Dental Market Impacted by Rising Interest Rates Leading to Lower Deal Volumes in H1 2023
- Demand remains for quality private and mixed practices across the UK
- The changing economic environment and workforce challenges are leading corporations to reshape their portfolios through mergers and divestitures.
- Strong demand for lower priced practices from new buyers entering the market
- Corporate activity has been reduced compared to previous years as corporates and dental groups adjust to rising operating costs and a higher cost of capital
- Recruitment and retention remain key operational challenges in the sector, although there is a greater sense of optimism across the profession that the supply of dentists in the UK is increasing.
- Corporate and independent owners report strong patient demand.
“There is very little damage in the dental sector as the profession benefits from strong demand and a consumer base that is more aware of oral health than ever before,” the report said.
“This could change, however, if patient spending and sector funding fall at a time when the cost of living is rising.”
Strong sales
The report found that there was a 2.2% increase in the average sale price from 2021 to 2022. This marks a smaller increase than from 2020 to 2021, which, according to Christie & Co, reflects the stabilization of market dynamics after the increase next sensitive. the pandemic.
The dental market in the first half of 2022 was particularly active, with significant group and individual large transactions. Activity was also very strong in the latter part, as a number of larger groups competed mainly for private and mixed scale practices.
Christie & Co estimate that, in 2022, 430 dental practices were sold across the UK, excluding large corporate mergers. Key deals included the merger of the portfolios owned by Rodericks and Dental Partners, and the completion of the merger of Portman Dental and Dentex.
Now, 13% of all dental practices in the UK are now owned by the four largest dental groups – Mydentist, Bupa Dental Care, Portman/Dentex and Rodericks/Dental Partners.
However, the report highlights that the dental sector remains ‘strongly independent’, with a high proportion of practices owned by private groups and directors working independently.
Complicated dynamics
Paul Graham, Head of Dental at Christie & Co, said: “Today, we present the culmination of our comprehensive research and expertise in Dental Market Review 2023.
‘This is not just a report; is a lens into the future of the UK dental business sector. Drawing insights from key stakeholders, we delve deep into the complex dynamics shaping the sector’s landscape. Our findings highlight a strong and positive trajectory for the dental sector.
“The resilience and resourcefulness demonstrated by industry leaders, even in the face of challenges, is truly commendable. We believe the insights provided will pave the way for informed decision-making and strategic foresight.’
You can read the full report here.
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