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Dental Practice Valuations2019-09-02T20:08:16+01:00

Dental Practice Valuations

We offer free dental practice valuation if you are thinking about selling now, or in the future.

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For some clients, our help begins many years before they actually plan to sell their practice. This involves helping them plan a future they desire, building a practice of value and then finding the most suitable buyer for their dental practice.

As a firm of experienced Dental Accountants and Business Advisors, our team are perfectly placed to help you with this important stage in your career.

Furthermore, our approach to selling your practice is a mixture of financial analysis and commercial acumen.

Thus, it’s a rare quality seen in the UK Dental market.

We will always prepare a realistic valuation of your practice, based on market values, a sales pack and then go about matching our extensive buyer’s database to your practice.

Thus, it ensures a high degree of confidentiality is maintained throughout the whole process. We believing by carefully matching buyers with sellers, the sales value obtained will always be much higher than a one size fits all approach to marketing practices to buyers.

An In-Depth Guide to Dental Practice Valuations

Valuation Methodologies

Historically, valuations of dental practices were based on a % of turnover. However, as the market has become increasingly sophisticated with new investors in the market, we are seeing that profits are the main driver of valuations, not turnover.

The two main methods of valuation are:

Turnover based %

This approach is based around a % of turnover. For example a private practice may be valued at 150% of turnover. So a £100,000 turnover practice would be valued at £150,000.

EBITDA and EBITDA Multiples

EBITDA stands for Earnings before interest, taxes, depreciation, and amortization.

It is a commonly used accounting acronym used to determine the true operating profit from a business.

Individual buyers, multiple site owners and private equity investors frequently use the EBITDA methodology to determine the ability of a purchaser to service the debt level. Banks and lenders also determine EBITDA to ensure the business is generating sufficient profit to service any borrowings.

It is worth considering that EBITDA does not take into consideration any capital expenditure (the funds needed for capital investments) such as the need to add a surgery.

In addition, EBITDA margin is defined as EBITDA divided by turnover and is expressed in % terms.

 The Dental Practice EBITDA: How to Establish

To establish the EBITDA level during a valuation process, we remove costs such as depreciation and all other costs that an incoming buyer and new practice owner will not continue to sustain post completion. This is done on a line by line basis and will differ for every practice.

EBITDA Multiples in the UK Dental Market

Once the EBITDA figure has been established, a multiple is applied to determine a value for the dental practice. The EBITDA multiple in the UK Dental Market has been rising over the last few years

Current Dental Market EBITDA Multiples

Individual practices are currently being valued at a national average of x 6.4 EBITDA, based on a Dental Associate led dental valuation,

In certain areas valuations can be higher, these areas include London , the South east and the Midlands .

For larger groups (usually over 10 practices in size) a higher valuation multiple can usually be obtained as many buyers like the opportunity to buy an existing platform, rather than having to acquire one practice at a time, which can be costlier and time consuming.

In addition, Dental groups with an EBITDA in excess of £1m, can also have higher multiples applied to their EBITDA, again as a result of larger dental groups wanting to buy scale quickly.

Read​​​​ More

Dental Market Values vs FTSE 100

The Arbitrage Opportunity

Deferred Consideration

Our View of the Dental Market & Lending Criteria

Valuing your Dental Practice for Free

More Dental Practice Sales Services

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