The latest results published from the NASDAL (National Association of Specialist Dental Accountants and Lawyers) goodwill survey statistics were published recently. This survey covers the quarter ending July 31, 2021 and includes data on valuations as well as deals completed (i.e., practices bought or sold by NASDAL members’ clients in the period).
As the graph illustrates, the quarter saw big jumps both in those deals completed and valuations. In terms of deals done, goodwill as a percentage of fee income in the quarter across all types of practice averaged 144 per cent of gross fees – that was a significant leap from 128 per cent in the quarter to April 31, 2021. NHS practice goodwill bounced back with practice goodwill at 161 per cent of gross fees – up from 146 per cent in the previous period.
Private practices goodwill values saw a big increase – up to 133 per cent of gross fees from 110 per cent of gross fees in the previous quarter. Mixed practices reduced slightly with values of 145 per cent of gross fees from 156 per cent of gross fees last time.
Normal service resumed?
Alan Suggett, specialist dental accountant and partner in UNW LLP who compiles the goodwill survey, commented, “In my commentary on the last results, I did say that I was surprised to see big drops in goodwill values and that it had not been my subjective experience. As with all statistics, there can be anomalies.
“It seems that the figures from this latest quarter have borne that out. Why did last quarter’s figures occur? I would be speculating but it could be that there was a backlog of discounted deals that were delayed due to covid and they all went through in the one quarter.
“Certainly as we move forward, NASDAL members are reporting that the market is robust and that sale prices are not being reduced and are reaching their full potential.”
The goodwill figures are collated from accountant and lawyer members of NASDAL in order to give a useful guide to the practice sales market. These figures relate to the quarter ending July 31, 2021.
NASDAL reminds all that as with any averages, these statistics should be treated as a guideline only.