Simon Hughes, head of medical at Christie & Co said, “So far, 2016 has been very buoyant and this momentum looks to continue until the end of the year and beyond.
“Appetite from buyers looking to acquire all types of dental practices across the whole of the UK remains strong, and as we have seen for some time, demand for practices continues to outstrip supply.
“Christie & Co arranges on average 12 viewings per practice for those coming to the market for sale and 80 per cent of those sold achieve above the asking price, demonstrating the aforementioned imbalance of supply and demand. UK market activity shows no signs of abating and we frequently see achieved values being in excess of the market guidelines/average, both as a multiplier of net annual adjusted profit (EBITDA) and as a percentage in the pound.
“Generally all buyer profiles – corporate, multiple operators, independents and first time buyers are active, with each bringing certain attributes to the market across all regions of the UK.”
South and Wales
Demand for NHS and quality private practices across the south is very strong with London the main ‘hotspot’ where demand is insatiable from associates, multiple practice owners and corporates. In the first few months of the year, we have brokered a number of very significant deals including the sale of Smile and Madeira Dental in Dorset on behalf of its owner/partners and Marlfield House in Hampshire, one of the largest single transactions in recent years.
Midlands/Central England
Strong demand and low supply are just two factors that seem to be driving practice sales in the Midlands and central regions. The West Midlands is without doubt the focus of many dentists’ affections with very high prices being sought and achieved for NHS/mixed and private practices. A recent example was Hawkins & Wilson Dental Care in Birmingham – a five surgery private practice that received half a dozen offers from a wide range of buyer profiles. As prices have risen in conjunction with the lack of supply, dentists have sought to find better value and greater choice elsewhere, which has seen demand grow significantly in the East Midlands.
North
Across the north of England and Wales buyers are continuing to pay record prices for quality private and NHS practices; demand is at its fiercest around the major conurbations of Manchester, Liverpool and Leeds, with first time entrants and private multiple practice owners fuelling considerable activity across the region. The recent sale of The Dental Surgery in Runcorn generated some 32 viewings and 21 offers, emphatically demonstrating the strength of the northern dental market and the appetite for NHS practices in particular.
Scotland
The dental market north of the border is proving to be very attractive for buyers throughout the UK. There is no Care Quality Commission (CQC) in Scotland and, as yet, no restrictions on the provision of NHS services, meaning practitioners can effectively practise where they want. Demand across the central belt of Scotland is obviously the strongest, however since the turn of the year we have also brokered sales in Inverness, Perthshire, Fife and Dumfriesshire. The recent sale of Inchcape Dental Practice in Fife was a landmark result; this seven surgery purpose built practice achieved a record multiple which reinforces the strength of the Scottish dental market.
Christie & Co is a large RICS regulated firm selling dental practices in the UK, and has a unique insight into dental transactions across all regions of the UK.