Business Outlook 2025 | Dental

The independent sector continued to dominate market activity throughout 2024, with first-time buyers, existing owners, and smaller groups driving over 80% of agreed transactions. This sustained momentum in the volume segment was reflected in pricing, with practices achieving an impressive average of 108% of their asking price.

As borrowing costs stabilised over the year, the market gained more confidence, particularly in practice acquisitions. Viewings surged by 19%, offers received rose by 17%, and the number of agreed deals soared by 26% compared with 2023. The aggregate value of all offers increased by 1.5% which, when allowing for the increased volume of offers received, reflects the dominance in independent market activity.

Activity levels were further bolstered by a significant 18% rise in the number of practices brought to market in 2024. This influx of supply provided prospective buyers with a wider range of opportunities, influencing the average number of offers per practice sale. After climbing from 2.2 in 2022 to 4.4 in 2023, the average rose to 4.8 in 2024, reflecting the evolving market dynamics.

Movement in the average price of assets sold, year-on-year

The market has experienced a further pricing recalibration, with valuation multiples adjusting to more sustainable levels. Our data indicates that this correction has now stabilised and, indeed, is showing signs of renewed optimism on the horizon. While the transactional market in 2024 saw fewer major deals to corporate operators, this shift has opened up exciting opportunities for independent and first-time buyers.

We anonymously surveyed dental professionals across the country to gather their views on the year ahead.

• A continued appetite from independent groups and owner-operator first-time buyers for all practice types
• Increased numbers of sellers wanting to exit before future changes to Business Asset Disposal Relief (BADR)
• Higher National Living Wage (NLW) rates affecting practice profitability along with employers’ National Insurance Contributions (NICs)
• Private Equity-backed corporate buyers returning to the market in light of stabilised interest rates and successful periods of integration and divestment
• Continued issues with recruitment, alleviated somewhat by the streamlining of the PVLE & ORE processes
• Due to the financial restrictions placed on NHS-focused practices, such as the ineligibility for the increased employment allowance, acquisitions focused on NHS-heavy portfolios might have less appeal to buyers. Buyers may, instead, target practices with a larger private patient base, which are less constrained by the 2024 Autumn Budget’s public sector stipulations