After a relatively brief period of dental practice acquisitions and sales being put on hold, we have noticed a gradual increase in transaction activity. We have seen an increase in purchases by corporate groups as well as SME practices looking to expand. There also been a growing trend in a number of associates acquiring their first dental practice looking to secure themselves an income. Supply still remains limited, and, as a result, the multipliers achieved are broadly reflective of pre-COVID levels with a number of practices achieving above the asking price.
Since the reopening in July, most dental practices continue to struggle keeping with demand. According to The Association of Dental Groups’ (ADG), eight million patients waiting for an NHS dental appointment this Christmas. As a result, there has been an increase in the number of private treatments from patients who were unable to access NHS appointments.
Higher-end treatments such as adult orthodontics have also experienced a growing demand. While some people were affected financially by the pandemic, some found that they have more discretionary income that would otherwise be spent on holidays and going out. This demand for private treatments is likely to continue, which creates an opportunity for practices that are looking to expand the private dentistry in their practice and work more independently of the NHS.
With regard to the NHS, there are big challenges relating to future contractual structures and funding. Large debt accumulated during the COVID-19 pandemic means that it is unlikely that funding for the NHS dentistry will increase.
Going forward, it is still unclear if the Christmas holidays will lead to an increase in transmission rates or if the effects of the COVID-19 vaccine will be widely felt in the community. It may take a while for the authorities and regulators to relax the dental patient journey.