Practice goodwill values grow unabated – even with corporate withdrawal
This week sees the results of the latest NASDAL (The National Association of Specialist Dental Accountants and Lawyers) goodwill survey published and practice valuations continue on their upward trend.
Alan Suggett, specialist dental accountant and partner in UNW LLP who compiles the goodwill survey, commented, “Actual practice sales values were stable which does seem to back up my feeling that there has been no Brexit effect as of yet. However, perhaps the biggest news of the last month is that mydentisthave withdrawn from buying any dental practices. Indeed, this even affected those that were already in the process of being purchased. Sources have told me that apparently this move has been taken due to a number of practices already in the group not performing as they should, and an operational decision was taken to iron out these issues before further expansion takes place.
“My regular communication with practices’ sales agents suggests that there is still a huge appetite for practices and this withdrawal will have little or no effect. There seems to be a general perception that the corporates, including mydentist, are buying up every practice across the country but that is certainly not the case in the experience of agents I spoke to and there is sufficient demand for the market to continue on an upward trend. However, where an effect might be felt is at the ‘mini-group’ end of the spectrum – now probably isn’t the best time to sell and they may have to explore different solutions such as breaking up the group or sale to private equity.”
Nick Ledingham, chairman of NASDAL and a partner in specialist dental accountants Morris and Co, added, “The withdrawal of such a ‘big beast’ as mydentistwill certainly create headlines and a certain amount of gossip, but it does seem that the effect on the buoyant practice sales market will be slight.”
The goodwill figures are collated from accountant and lawyer members of NASDAL on a quarterly basis in order to give a useful guide to the practice sales market. These figures relate to the quarter ending October 31, 2016.
NASDAL reminds all that as with any averages, these statistics should be treated as a guideline only.