Red-hot market for buying dental, veterinary and other health practices begins to cool

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Industry sellers say the seller’s market in dental and other health practices has cooled dramatically this fall, in part because of rising interest rates

Large consolidators, many backed by international private equity funds, had been snapping up the clinics of veterinarians, dentists and others in recent years as part of an accelerating drive to roll up the fragmented markets and extract profits.had seen the purchase prices of clinics skyrocket over the past few years.

The company said in its third-quarter report, released Nov. 9, that it was taking its foot off the gas for the rest of this year and next to focus on deleveraging. It had $1-billion of senior debt in its most recent report, of which half had a fixed interest rate of 6.6 per cent and the other half a floating rate. The company’s ratio of net debt to EBITDA was 7.2 to 1, according to S&P Global Market Intelligence.

Those working on the ground say buyers’ constrained budgets from rising rates and higher expenses because of inflation are leading to lower prices and less buying activity. Douglas Jack, a lawyer at Borden Ladner Gervais who specializes in working with veterinarians, said veterinary consolidators have dramatically slowed their buying in the past two months, with some stopping altogether.

“I think it’s going to be a two-way approach, where buyers are going to want lower valuations to go ahead and do the deal, and sellers are maybe not going to be satisfied with that,” said Alan Ulsifer, CEO of Calgary-based optometry network FYidoctors.

 

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Particularly when customers walk. My dentist sold out and now you get random inexperienced dentists. The last one I had didn't even know how to use the equipment and squirted me in the face. Also put a filling in my front tooth that didn't match the colour.

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Fonte: TorontoStar - 🏆 60. / 55 Consulte Mais informação »