Goodwill prices have held up throughout a turbulent 2020, according to the latest results published from the NASDAL (National Association of Specialist Dental Accountants and Lawyers) Goodwill Survey statistics.
In the period from 1 April to 30 September 2020 based on deals done (i.e. practices bought or sold by NASDAL members' clients in the period), goodwill as a percentage of fee income in the period across all types of practice averaged 141% of gross fees - only down from 159% from the quarter to January 2020 - the last pre-COVID-19 quarter.
NHS Goodwill values were higher when compared to the previous quarter with 191% of gross fees across the six months to 166% of gross fees last time. Private goodwill values fell back to 114% of gross fees from 143% of gross last time. The big fallers were mixed practices - falling from 188% of gross fees in the quarter ending January 2020 to just 110% of gross fees this time.
Alan Suggett, specialist dental accountant and partner in UNW LLP who compiles the goodwill survey, said: 'I have to say that both the level of deal activity and the pricing levels have surprised me. I was expecting to see a big drop in the number of practice sales coupled with a sharp fall in prices. In NASDAL members' experience, there have been only limited price reductions and the corporates haven't used COVID-19 as an opportunity to negotiate lower deal values. It certainly does show that the UK dental practice sales market is not the nightmare that some commentators have suggested!
'We do know that many lenders are coming up with an increasing array of hoops for borrowers to go through - which puts cash buyers in a stronger position.
'We decided not to include valuations during this six month period as the amount of data was lower than usual, and valuations are invariably subjective, which is unhelpful during this period of uncertainty.'