The survey covers the quarter ending October 31, 2024, and includes data on valuations as well as deals completed (i.e., practices bought or sold by NASDAL members’ clients in the period).
The quarter saw a big increase in goodwill values across the board. Overall, goodwill values were at 153 per cent as a percentage of gross fees - a big rise from 113 per cent in the previous quarter. NHS goodwill values were up to 175 per cent of gross fees - up from 129 per cent in the previous quarter. Private practices were also up; from 111 per cent as a percentage of gross fees to 143 per cent. The survey revealed even mixed practice goodwill values (which had struggled in recent times) rose from 107 per cent as a percentage of gross fees to 154 per cent.
Mike Blenkharn, partner and head of dental at UNW LLP who compiled the goodwill survey, said, “These figures certainly do point towards the return of a buoyant market. The figure of 153 per cent as a percentage of gross fees is strong and I may expect the market to fall back a little from this in the next quarter. The figures illustrate the time lag that exists in dental practice sale data of around nine to 12 months. This means these numbers are reflecting 2023 and early 2024 when there was an explosion of activity. I believe that the market will stay strong if not quite at these heights.”
Johnny Minford, commercial and development director for DJH Mitten Clarke and NASDAL Media Officer, added, “We have definitely seen a bounce which these figures, but I agree with Mike that the time lag means these are reflecting deals commenced 12 months ago. Since then, we have had an increase in interest rates, an election and a knock on general business confidence. We may see a flurry of activity before March 31, 2025, to avoid the tax changes.”
The goodwill figures are collated from accountant and lawyer members of NASDAL to give a useful guide to the practice sales market. NASDAL stated that as with any averages, these statistics should be treated as a guideline only.