An Update on what’s going on across the UK and European Dental Markets

2017 Sep 25

An Update on what’s going on across the UK and European Dental Markets

Consolidation growth across the UK and European Dental markets

The last 3 years have seen an unprecedented change in the UK and European Dental markets.

Whilst we have seen increasing consolidation across the UK market, across Europe a similar trend is occurring.

We feel we are at the early stages of consolidation of the complete European dental industry. Investors are seeing that there are considerable efficiencies and gains to be had from scale and consolidation. However, getting this right is not easy.

In fact, we have seen in the UK and European markets some of the early investors struggle to build the large successful dental corporates they aspired to do so.

For every success story, there have been several casualties over the last few years.

A fragmented dental market across Europe

Dentistry remains heavily fragmented across Europe, yet the size of the Dental services market is substantial and growing. This presents a prime opportunity for consolidation.

Increasing regulation, dentists reaching retirement age and a growing number of female dentists are changing the structure of how dentistry is practised.

Strategic investors and private equity see these changes as an opportunity, offering scope to acquire, consolidate, improve efficiencies, and sell at greater multiples.

The UK dental market in the last 2 years

Approximately 1,400 practices out of 11,000 dental practices across the UK belong to Dental Body Corporates. We are seeing small owner managed groups emerge, seeking to acquire further practices, and then exiting with a sale to larger dental groups.

Recent significant deals include the purchase of Southern Dental by Swiss-based Private Equity firm, Jacobs Holding. Interestingly, Jacobs Holding owns a dental group in Scandinavia too.

One of the larger deals of 2016 was the purchase of Oasis Healthcare by BUPA. Again, interestingly, BUPA own Sanitas, a dental chain in Spain.
Sources suggest that MyDentist, the largest Dental Body Corporate in Europe, are currently not acquiring additional practices whilst apparently targeting operational and delivery challenges.

This presents an opportunity for a buy and build project delivered by existing and new entry investors.

In the last 12 months, the team at Samera have now begun working with a significant number of new investor groups, and we anticipate this trend to continue as investors appetite for the UK dental market grows.

The acquisitions sought by groups are highly driven by profit. Investors are always looking for individual practices or dental groups with a strong possibility of integrating easily into their existing groups.

Costs savings such as materials, labs, wages, clinical waste and other practice overheads are typically achieved in the first year post-acquisition and profit improvements plans start taking place early on. 

The European dental markets

As we have witnessed in the UK the most successful dental groups are the Groups that grew without losing touch with their locality and retained dentists and support staff post-acquisition.

Building a pan- European Group is a new and very attractive proposition and one that could work using similar principles as the successful UK Groups. Retention of dentists, and acting local, along with a strong brand and ensuring efficiencies are obtained will be good starting point for further consolidation across Europe.

In the last 2 years across Europe, DentalPro in Italy acquired Dentadent and Gruppo Giovanni Bona before selling to BC Partners (Bencis Capital Partners).

Elsewhere in Europe Vitaldent in Spain was acquired by JB Capital.

Whilst, Jacobs Holdings from Switzerland, is rapidly growing their presence in Northern Europe via the acquisitions of Colosseum Smile and Southern Dental. 

What next for the European Dental Markets?

As seasoned experts in the UK and European Dental market, we feel the market possesses all the necessary ingredients for further consolidation.

The fragmented nature of the market, increasing private equity and strategic interest in the sector, and the changing fundamentals of the actual marketplace across Europe, highlight that the opportunity for further consolidation is considerable.

How Samera can help 

Samera Practice Sales is part of Samera Healthcare Advisors, the leading professional services group for Dentists.

Through our close contact with Dentists, Dental groups, and both buyers and sellers across the UK and Europe, we are perfectly positioned to assist.
Samera work with a number of Dental groups and a growing number of Private Equity funded groups, so if you are seeking assistance on either the buy or sell side, we can help you.

Over the years we have grown strong connections not only in the UK and Ireland but also in Southern Europe too.

Our main qualities are being proactive, efficient, making things happen and our multilingual and specialist team that can be your conduit to Pan- European consolidation plans.

Please get in touch with our expert team if you need assistance.

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About arun

Arun Mehra FCA is a world leading expert on Dental Business and CEO of Samera. He has extensive expertise on financing, deal structuring and tax issues arising in Dental Businesses.

Outside of Dentistry, you can probably find him with a backpack travelling around the world.