Value Proposition

The value creation potential shown by the example of dentistry consolidation is driven by the need for efficiency and unlocking trapped value. The consolidation trend, particularly led by private equity investors, presents various value creation levers such as operational improvement, asset utilization, quality of care, marketing, procurement, and vertical integration.

Best practices for success include clear platform design, robust integration, employee centricity, patient engagement, scale focus, and effective marketing. With a significant number of transactions and PE firms involved, driving EBITDA improvement becomes crucial for creating substantial value in the sector.

PwC leverages its unique expertise in value creation to assist private equity clients by addressing challenges related to their healthcare roll-up strategies

Client challenges

Healthcare systems are under pressure with increasing demand and scientific and technological innovation driving cost increases.
Consolidation and business model innovation could drive efficiencies and unlock capacity and trapped value We see a strong wave of consolidation in Dentistry, mostly in domestic deals and driven by PE-investors.
Reality shows mixed results due to practical challenges in realizing the full potential of value creation plans.

Our approach and deliverables

A broad range of possible value creation levers exist: from operational improvement of individual practices, higher asset utilization and better quality of care to marketing & branding, procurement benefits and vertical integration. Large-scale, multi-clinic chains fundamentally have more value creation levers they can pull than individual clinics ‘Getting it just right’ is challenging, but several best practices should be considered to drive success:

Clear platform design
Robust integration process
Employee centricity
Patient engagement
Focus on scale and potential
Marketing & branding

Impact to the clients

Over the past 4 years there have been about 150 transactions in European Dentistry
At least 20 PE firms own Dentistry assets in Europe and will have to exit in the next 3-4 years
With multiples under pressure, driving value creation through EBITDA improvement is crucial: bringing the average performance of chains (approx. 20% EBITDA) to the level of well-run clinics (35-40% EBITDA) could create substantial value for the investors