Scottish dental market bounces back to pre-COVID levels
Confidence has been underpinned by how quickly the profession has adapted to the pandemic
The Scottish dental market is remarkably resilient. Competition for practices on the market remains quick and fierce with the implementation of closing dates for offers and multiple offers on practices being commonplace.
There is significant demand for all types of dental practices, with corporate buyers who were active pre-COVID now acquiring and trying to fulfil their ambitious buy and build targets to make up for lost time. Privately-owned dental groups are also acquiring again but are less active than they were pre-pandemic as they are focussing on consolidating and running their existing businesses.
They are buying opportunistically as they appear under no real pressure to grow to a certain size by third party investors. We continue to see a reinvigorated appetite from independent buyers purchasing their own practices and expect this to continue in the long-term. As pricing and demand for urban locations increases, buyers are widening their search criteria, seeking out practices in more rural locations.
The number of transactions in the market is also returning to pre-COVID levels as many practice owners who put their business plans on hold during the pandemic come to the market to take advantage of the competitive selling conditions. The likelihood of CGT rises in the Autumn Budget could also place another artificial deadline and a spike in practice completions around September and October.
Confidence has been underpinned by how the profession has quickly adapted to the pandemic and there is clear evidence of price inflation for larger practices. We expect that buyers will continue to bid aggressively for such businesses.
Bank lending has also returned to near normal levels, encouraged by the strong trading conditions that many have experienced, particularly in the private sector. Despite a prior nervousness to lend to first-time buyers, banks in Scotland are generally supportive of the dental market – which has fared well through the pandemic – and several challenger banks are coming into the market which is positive for those wanting to acquire.
Paul Graham is Head of Dental at Christie & Co