Outlook for 2024 reveals increasing positivity amongst dental practice owners

Overview

The dental industry, like many sectors, has faced its share of challenges due to cost inflation and rising interest rates. Before the mini-budget announcement in September 2022, the industry was already adapting to less predictable market conditions. Despite these hurdles, including ongoing workforce issues, particularly within NHS dentistry, Christie & Co maintains a positive long-term outlook for the dental market.

In 2022, the dental sector experienced robust transaction activity, largely fuelled by corporate buyers committed to acquisitions. However, the swift escalation in interest rates, soaring operational costs, and staffing difficulties led many corporate entities to halt their acquisition strategies in early 2023. This shift resulted in a notable decrease in transaction volumes as companies shifted their focus towards organic growth over acquisitions. During this period of change, Christie & Co reported a 9.8 per cent decrease in transaction completions.

In contrast, the independent dental market saw a resurgence in the latter half of 2023. With reduced competition from corporate buyers, there was a significant uptick in transactions involving first-time buyers, current owners, or smaller independent groups, accounting for 69 per cent of deals. This revival was partly driven by Christie & Co introducing 45 practices to the market on behalf of Bupa earlier in the year, leading to a 150 per cent increase in agreed transactions. This surge in the independent sector also led to practices achieving, on average, 113 per cent of their asking price in 2023. Furthermore, the number of offers received increased on the prior year by over 80 per cent, with an average of 4.4 offers per sale, nearly double that of 2022.