In 2021, M&A activity in the DSO space continued to witness record levels as the primary growth drivers for industry consolidation remain unchanged. In other words, the availability of workforce continues to be scarce and the supply of capital for PE and investment groups is still available in abundance, among other extrinsic factors.
While the revenues across the dental services sector in US witnessed a decline of as much as 6 percent in FY 2020, the industry bounced back to normalcy in H1 2021. If we look at the different treatment services, the cosmetic dental procedures were among the highest gainers (averaging 10 percent growth in number of appointments). Other treatment services that witnessed YoY growth include in-office orthodontic treatments, whitening treatments among other cosmetic treatments. This is in sharp contrast to a 47 percent YoY decline in dental hygiene appointments scheduled in H2 2020 (versus H1 2019).
According to another survey organized in H1 2021, approximately 10 percent of all dental practices surveyed had to downsize their teams and as many as 27 percent of surveyed dental offices reported that they raised their fees in the recent months to combat against reduced liquidity levels.
Based on the outcome of an ADA organized in Q2 2021, as much as 94 percent of the patients surveyed reported returning to have been to the dentist or planning to schedule an appointment in the near term – another indication of normalcy in the US dental services space.
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