Dental market update – for Buyers and Sellers

Since lockdown commenced over 10 weeks ago we at ProPractices  have been keeping in regular communication with a range of stakeholders in the Dental market to include banks, bank valuers, lawyers, independent practice owners and the larger Dental groups

From a clinical and operational perspective the dominant issues seem to be:

  • PPE availability and costs
  • SOP  – defining, phasing in/ out, AGP’s
  • Staff – furloughing, Associate rates/ status
  • Impact of PPE and SOP on subsequent patient throughput and profitability
  • The return to work process and protocols

Despite the confusion around the aforementioned issues, somewhat surprisingly the market for dental practices has NOT been materially affected by the C-19 issues as explained below. Financial liquidity is vital for any functioning market and we are assured in our regular communication with the Banks that operate in the Dental market, that they remain very committed to the sector and continue to provide attractive terms relative to other market sectors.

Demand for buying Dental practices

Of the 1,000 or so Dental practices that are sold in England and Wales each year over 80% are sold either to Associates or to independent Dental practice owners looking to grow their market share.

      i.        Associate buyers

Over the last 4-6 weeks, we at ProPractices have seen a surge in enquiries from Associates in Wales and West looking to acquire practices, for the following reasons:

  • Uncertainty around Associate UDA allocations and rates post Covid
  • Nervousness around private dentistry in terms of Associate income share given likely slower throughput of patients
  • Some initial ‘noises’ within the industry around Associates having employed  status vis a vis self employed
  • Associates wishing to take control over own financial destiny

In response to the aforementioned points, Associates are incentivised by the very low cost of capital complemented by the increasing presence of the ‘Bank of Mum and Dad’ to take these first steps on ownership ladder. Inevitably the more entrepreneurial dentists are hoping to pick up ‘value’ opportunities or distressed practices.

    ii.        Expanding independent practices

There is always a steady stream of independent Dental principals who are following a ‘buy and build’ strategy. We are seeing a consistent level of demand from this cohort who want to:

  • Gain a larger market share in their existing geographical market
  • Acquire additional skill sets and dental services,
  • Build critical patient mass
  • Develop bespoke capitation plans
  • Develop economies of  scale and operational efficiencies in terms of practice management, resources, supply chain etc

   iii.        Dental Groups

ProPractices  are in regular of contact with many of the 25 dental groups who account for 15% of the market.

In general, they as a cohort remain committed to growth by acquisition. The exception would be MyDentist who is focussed on integration and operational efficiencies and more recently BUPA who have temporarily withdrawn from acquisitions to focus on integration of the practices they acquired over the last 24 months. Many of the remaining 23 dental groups are private equity backed and have market share and acquisition targets to meet. They are, in the main, committed to their original business plans however, in some cases, a few are ‘pivoting’ in response to Covid 19 and increasing their exposure and focus to NHS practices. On the other hand other groups have sharpened their focus onto the Private Dental sector. In general these groups are focussed on multi sites operations or large practices with minimum of 4 chairs and turnover approaching £1million as well as specialist ‘high end‘ practices – specifically Orthodontic and Implant practices

Market Supply of Dental practices

The process of engaging with practice sellers is a long term process centred on building trust, relationship management and time. At ProPractices  our journey with a practice owner – from the initial discussion through to sale, can take as little as 6 months to a 2-3 years.

Our recent client experiences is as follows:

  • Covid 19 has accelerated the sales process due to operational, clinical and financial reasons and as a consequences sellers wish to expedite the exit strategy
  • No change and wishes to progress the sale process in an orderly fashion

Supply of practices to the market broadly remains the same as usual with around  5% of all practices coming to market annually

Practice valuation, competition and consideration

Valuation is always an emotive subject with Dentists. Although a useful yardstick it can be a bit of a theoretical exercise especially if no buyers are identified or interested!  ProPractices’ primary focus is to ensure that there is the optimal level of competition in place for the sales process.  This will comprise a qualified pool of multiple buyers in order to maximise the practice consideration.

In terms of ‘average’ Mixed and NHS practices, certainly in Wales and West, values  broadly remain the same as pre-Covid levels although there is some nervousness, naturally, regarding private fee components  and the short term impact on cash flow and patient capacity. So the typical mixed practice may have taken a slight softening to their values in the short term and any nervousness is likely, we believe certainly with larger practices, to manifest in slightly larger retentions and deferrals

As regards private Dental practices there is a concern around the implications of Covid 19 on the reduction in patient throughput and increased operating cost related to a more cumbersome SOP, additional cleaning time and the cost of PPE. However, we are hearing of some innovative private and implant dentist looking to maintain productivity and profit levels by looking to optimise the level of patient surgery visits by utilisation of virtual consultations. Typically, these sessions will be used for initial consultative stages of the implant journey, cosmetic dentistry as well as some general dentistry using online care platforms and video-based services such as Zoom, WhatsApp, Facetime etc

As regards large multi-site practices it is certainly felt by leading industry figures that valuations and considerations for these types of operations had become unsustainable over the last few years. The market was due for a market correction and we believe that incredible multiples of 13x will not be seen for the foreseeable future and will return to more acceptable levels of just below 10x.

We at ProPractices hope this is a useful update for the Dental market in Wales – especially potential buyers and sellers.

Exclusive private Cardiff Dental practice sold to local Dental entrepreneurs

Exclusive private Cardiff Dental practice sold to local Dental entrepreneurs

Cedars Dental Practice Ltd in Llanishen, Cardiff has been acquired for an undisclosed sum by Dr Nitin Duggal and Dr Chris Truman. Nitin and Chris are old friend who met at Cardiff Dental School where  they graduated in 2009. Nitin owns The Dental Surgery in Grangetown Cardiff. Chris is an experienced Associate and has practised extensively in and around Cardiff.

Cedars Dental Practice was established by Iain in 1994. Dr Manson qualified as a dentist in 1982 when he graduated from the University of Witwatersrand in South Africa. He obtained a Masters in Periodontology at the Cardiff Dental school in 1987.

Said Iain Manson, previously Clinical Director and Owner of Cedars Dental Practice Ltd

“I am delighted that after 10 years that we are going to be able to move onto the next chapter for Cedars with the support and involvement of Nitin. We look forward to continuing to provide our patients with outstanding clinical care and service. It has been a seamless process and I am particularly grateful to Nitin and Chris and in particular, our advisors Hywel Loveluck and Owen Sennitt of ProPractices who have managed the transaction process on our behalf.”

Said Dr Duggal

“I’d certainly like to echo Iain’s comments and look forward to working with him, our new team and indeed our patients as we effect a transition with Iain over the next year or so. Cedars is an exciting acquisition for us and present excellent private dentistry opportunities for in prosperous and growing area of Cardiff North

Said Hywel Loveluck of ProPractices Advisory Ltd,

“Both Owen Sennitt and myself are delighted that our researched-based approach was able to identify and match Nitin and Chris as a potential purchaser for Cedars. Now both parties have now successfully completed the deal, I am sure the patients will be equally delighted with the care they will receive from them and indeed Iain, as part of a planned transition process.”

The transaction was managed and effected on behalf of the vendor by ProPractices Advisory Ltd, a specialist consultancy operating in the Welsh Dental sector. The legal process was managed and advised by Chris Davies and Rhiannydd Llewellyn of JCP Solicitors.

Leading North Wales dental business sold to Anglesey Dentist

Deintyddfa Penlan Dental Care  has been acquired for an undisclosed sum by Elsbeth Iorwerth. Elsbeth, a Welsh speaker and farmers daughter from Anglesey is a graduate of Cardiff Dental School. Post qualification she initially practiced in Swansea before heading back home to North Wales a few years ago to practice and start a family with her husband Hywel, at their home in Caernarfon.

Deintyddfa Penlan Dental Care was established by Eleri Griffith in 1995. Eleri also qualified from Cardiff Dental School. and Post qualification she practiced as a Dentist in Bangor. In 1995 she established a new private practice in Pwllheli and in 2004 Dr Griffith acquired the freehold, assets and goodwill of Penlan Dental Practice and following a refurbishment project both practices were merged and integrated as one comprehensive  practice – Penlan Dental

Said Hywel Loveluck of ProPractices Advisory Ltd,

“Both Owen Sennitt and myself are delighted that our researched-based approach was able to identify and match Elsbeth as a potential puchaser for Penlan. As Eleri and Elsbeth have now succesfully completed the deal, I am sure the patients will be equally delighted with the care they will receive from Elsbeth and indeed Eleri, as part of a planned transition process.”

The transaction was managed and effected on behalf of the vendor by ProPractices Advisory Ltd, a specialist consultancy operating in the Welsh Dental sector. The legal process was managed by Rebecca Mansfield-Fellowes of Mansfield Fellows Solicitors on behalf of the vendors, and the purchaser  was advised by Chris Davies and Rhiannydd Llewellyn of JCP Solicitors and Rhys Harris of Owain Bebb a’i Gwmni, Chartered Accountants.

ProPractices news – Sale of high profile Welsh dental implant business to BUPA Dental

Smiles Better Dental Partnership has been acquired for an undisclosed sum by BUPA Dental. Smiles Better is a high profile and leading dental and implant practice based in Abergavenny. Headed up by the renowned Dental Implant expert Nigel Jones, he established the practice over 25 years ago along with his partners David Latcham and Martin Kenyon. Over that period of time they have grown an impressive private practice undertaking both general dentistry as well as Implant referrals working with a network of close to 100 dental practitioners throughout Wales and the West

Said Nigel Jones, of Smiles Better Partnership

“We felt it was th right time to move onto the next chapter for Smiles Better with the support and investment of BUPA Dental. Along with my partners Martin and David and our excellent team led by Jill we look forward to continuing to provide our patients as well as our referral partners with outstanding clinical care and service. It has been a seamless process and I am particularly grateful to the leadership team at BUPA Dental and our advisors Hywel Loveluck and Owen Sennitt of ProPractices who have managed the transaction process on our behalf.”

BUPA Dental was founded in 2016 when BUPA acquired Oasis Dental Care. BUPA Dental now comprises  of 350 dental practices and 2500 dental professional across the UK providing a range of Dental services in both the private and NHS context.

The parties to the transaction were introduced by ProPractices Advisory Ltd, who managed the process on behalf of the vendor and Nick Moore, Regional Acquisitions Manager at BUPA Dental.

Owen Sennitt, a Director of ProPractices commented that

“ProPractices were delighted to be able to assist Nigel, David and Martin on their plans for Smiles Better and to introduce, BUPA Dental. It was quickly clear to us that the two businesses were a logical fit.”

The legal advisors on behalf of the vendors were Jon Lawley, Madeleine Chapman and Damien Cann of Acuity Law. Jonathan Tyson and Brendon Whalley of Knights PLC acted on behalf of BUPA Dental.

 

 

ProPractices advise on the sale of leading Dental business to the dynamic Portman Dental Group

Malpas Dental Practice Ltd, a leading Newport dental business has been acquired for an undisclosed sum by Portman Healthcare. Malpas is a thriving dental practice based on the M4 corridor and was acquired by husband and wife team, Keith and Debbie Morgan, over 10 years ago. Over that period of time they have grown an impressive practice undertaking both NHS and private dentistry utilising a unique business model

Said Keith Morgan, of Malpas Dental Practice Ltd

“I am delighted that after 10 years that we are going to be able to move onto the next chapter for Malpas with the support and investment of Portman Healthcare Ltd. Both myself, Debbie and my excellent team look forward to continuing to provide our patients with outstanding clinical care and service. It has been a seamless process and I am particularly grateful to the leadership team at Portman Healthcare and, in particular, our advisors Hywel Loveluck and Owen Sennitt of ProPractices who have managed the transaction process on our behalf.”

Portman Healthcare Ltd was founded in 2009 by CEO Sam Waley-Cohen and is the fastest growing privately led dental group in the UK. The group operates over 80 practices across the UK, and has built a market leading reputation for modern facilities, patient friendly appointments, caring staff and the highest clinical standards.

Said Gary Chapman, Head of Acquisitions at Portman Healthcare Ltd

“We are delighted that Malpas Dental and its professional team of clinicians, nurses and administrators has joined our family of practices. It’s been a pleasure working with ProPractices on the process and we are looking forward to working with Keith, Debbie and the rest of the team. Malpas is an excellent practice and is complementary to our other practices in Wales.

The parties to the transaction were introduced by ProPractices Advisory Ltd, who managed the process on behalf of the vendor. Owen Sennitt, a Director of ProPractices commented that

ProPractices were delighted to be able to assist Debbie and Keith on their plans for Malpas and to introduce, Portman Healthcare Ltd. It was quickly clear to us that the two businesses were a logical fit.”

The legal advisors on behalf of the vendors were Greg Williams, Christy Welsh and Chris Doherty of Hugh James and on behalf of Portman Jon Lawley, Madeleine Chapman and Anisha Patel of Acuity Legal.

Notes to the Editor:

ProPractices is a consulting firm specialising in transactions, valuation and advisory in the medical professions and technology sectors. Led by Principal Directors Owen Sennitt and Hywel Loveluck. ProPractices are a firm of professional advisors to the dental sector in Wales and the West.

Contact:

Owen Sennitt m 07831 605061 e: owen.sennitt@propractices.co.uk
Hywel Loveluck m 07899 998864 e: hywel.loveluck@propractices.co.uk

Sale of leading South Wales dental business

Sale of leading South Wales dental business 

Courtland Dental Centre Ltd, leading valleys dental business has been acquired for an undisclosed sum by United Dental, which is a fast growing and acquisitive dental business based in South Wales. Courtlands is a thriving dental practice based in Merthyr Tydfil and was established by Managing and Clinical Director Huw Jones over 20 years ago.

Said Huw Jones, of Courtland Dental Centre Ltd

“I am delighted that after 20 years that we are going to be able to move onto the next chapter of Courtland with the support and investment of United Dental. Both myself and my excellent team look forward to continuing to provide our patients with outstanding clinical care and service. It has been a seamless process and I am particularly grateful to leadership team at United Dental and, in particular, our advisors Hywel Loveluck and Owen Sennitt of ProPractices who have managed a seamless transaction on our behalf.”

United Dental is headquartered in South Wales and comprises of over 10 dental practices located across South Wales and Nottinghamshire. United Dental provides a full range of NHS and private dentistry services and is headed up by serial entrepreneur and dentist Dr Colin Hancock.

Said Colin Hancock, Chief Executive of United Dental

“We are delighted to have acquired Courtland Dental Centre Ltd and its professional team of clinicians, nurses and administrators – we also look forward to Huw Jones joining the clinical board at United Dental. Courtland is an excellent acquisition and complementary to our other practice in Merthyr. It is also strategically located in the South Wales Valleys, an area to which we are wholeheartedly committed to providing quality dental care.

The parties to the transaction were introduced by ProPractices Advisory Ltd, who managed the process on behalf of the vendor. Hywel Loveluck, a Director of ProPractices commented that

ProPractices were delighted to be able to assist Dr Jones in his plans for Courtlands and to introduce Colin Hancock and his business, United Dental. It was quickly clear to us that the two businesses were a logical fit.”

The legal process was managed by Rebecca Mansfield-Fellowes of Mansfield Fellowes Solicitors. ends.

Notes to the Editor:

ProPractices is a consulting firm specialising in transactions, valuation and advisory in the medical professions and technology sectors. Led by Principal Directors Owen Sennitt and Hywel Loveluck, ProPractices is one of the leading and most respected professional advisors in the dental sector in Wales and the West.

Contact:

Owen Sennitt m 07831 605061 e: owen.sennitt@propractices.co.uk
Hywel Loveluck m 07899 998864 e: hywel.loveluck@propractices.co.uk

ProPractices News – Sale of leading Cardiff veterinary business

Cuminesvets, the busy and successful vet practice in Llandaff North Cardiff, has recently been sold for an undisclosed sum to Medivet; one the UK’s fastest growing Vet groups. The competitive process was managed by specialist transaction advisors ProPractices, led by Principal Directors Owen Sennitt and Hywel Loveluck.

Cuminesvets Ltd was established by Australian Steve Cumines over 25 years ago. Steve, who lives in Whitchurch, Cardiff will continue to work at the practice for a transitionary period and said’

“I am extremely grateful to Owen and Hywel at ProPractices for managing an impeccable and competitive sales process and for helping us become part of the Medivet family. The transition for our valued staff and myself to Medivet has been seamless and pain free.”

Said Arnold Levy, Chief Executive of Medivet,

“We are delighted to add such a strong practice as Cumines to the Medivet family. Steve has established and developed a fantastic business with an excellent team of people to whom we are very committed. This is a great practice for us in Wales and complements our other practice up the A470 – Ash’s of Merthyr Tydfil.

Says Owen Sennitt of ProPractices

“This was a great deal to be a part of and a pleasure to work with Steve who is a talented business man. The UK Veterinary has seen significant changeover the last few years with the arrival of a number corporate consolidators. Medivet, is a privately-owned company led by Arnold, they are great to deal with and we look forward to seeing the practice in Llandaff North going from strength to strength”.

ends.

Notes to the Editor:

ProPractices is a consulting firm specialising in transactions, valuation and advisory in the medical professions and technology sectors.

Led by Principal Directors Owen Sennitt and Hywel Loveluck, ProPractices is one of the leading and most respected professional advisors in the UK Veterinary sector.