Will you get a good deal?
The market price of dental practices would seem to be showing indications of weakening. This is the interpretation of the annual goodwill survey put together by Accountants and Lawyers from the National Association of Specialist Dental Accountants and Lawyers (NASDAL). Over the past six months or so the market has shown to be a little less bullish and more uncertain than in the recent past.
At Albert Goodman we are experienced in representing both sellers and buyers and if you would like to explore options further please contact Nick Hancock, our dental practice specialist, on 01823 286096.
NASDAL Quarterly Figures
The quarterly figures gathered by NASDAL show the average of goodwill as a percentage of gross fee income for the practice and this is beginning to drop back. There is also a greater disparity between valuations and deals. In recent times the market has maintained buoyancy by the big corporates acquiring dental practices but these type of acquisitions are reducing in number. Another indication of the market softening is that there has recently been a greater time lag between valuations and completion of actual deals. Part of this may be due to the amount of compliance work that needs to be done when a practice changes hands but the current level of uncertainty in the market is also contributing.
Goodwill deals seem to have peaked in mid-2016 at around 125% of practice value but the most recent reports suggest this has now slipped to around 116%. There has also been a growing disparity between valuations and the actual price at which a deal is done. Some of this may be due to agents giving an unrealistic initial asking price to encourage vendors. Towards the end of 2016, the average statistics showed goodwill valuations as high as 163%.
For all looking to sell or purchase finding the latest market outlook is essential.
For more information please contact Nick Hancock on 01823 286096.
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