How Dental Care Ireland is plotting to become the country's biggest dentistry chain

The three-year-old company has already taken over 16 practices – with more deals in the pipeline.

By Peter Bodkin Editor, Fora

DENTAL CARE IRELAND plans to build a network of up to 50 practices in the coming years – which would likely make it the country’s largest chain within a decade of its launch.

Since it was founded in 2015, the aggressively expanding dental clinic chain has bought 16 practices, three of which have been absorbed into other outlets, and the company is planning another four to five deals next year.

The company’s chief executive and co-founder, Colm Davitt, told Fora that the focus for the past six months had been on rolling out Dental Care Ireland’s brand and refurbishing outlets, but this would now shift to further acquisitions.

“The dental market in Ireland is growing at high single digits, but our practices are growing at a multiple of that number right now,” he said.

The industry got a boost a year ago when the government restored free scale and polishing services under the PRSI system leading to increased demand for the work.

Dental Care Ireland’s business model involves buying out and then overhauling long-standing practices, often when the principal dentist was planning for their retirement.

The acquisitions typically include a requirement that the former owners stay on in the business for several years with financial incentives in place to keep them motivated.

Davitt said he expected revenue to grow from nearly €10 million last year to more than €15 million in 2019 before any further deals were done.

“But we will be adding more practices. The next milestone for us would be to hit €20 million in revenue by the end of next year and move on from there,” he said.

“Our medium-term goal, over the next few years, is to double the size of the business, and based on the pipeline of opportunities that we have at the moment I think that’s very credible -  so to take the business from 13 practices to 25 to 30 practices.”

In the longer-term, Davitt added that the business could swell to incorporate 50 dental clinics, although that would “probably take another seven or eight years”.

Profitability

Dental Care Ireland is co-founded and chaired by the UK-based Nick Lowcock, whose Zeme Capital owns 75% of the business. Davitt holds the balance of its shares. 

Accounts recently filed for the company show its turnover hit nearly €10 million in 2017, however it delivered a net loss of €2.2 million for the year.

Company documents show that most of the firm’s funding had come from €9.3 million in shareholder loans from parent firm Zeme Capital. 

It had an average 111 staff on its books during the period, however Davitt said the headcount had since swelled to nearly 200 people.

He added that both the business as a whole and all of its practices were profitable on a day-to-day basis after significant investments during Dental Care Ireland’s set-up phase.

While many overseas markets feature large groups of company-branded dental clinics, Ireland has until recently been characterised by a network of individually-owned and -run operations.

Dental Care Ireland’s primary rival to be the country’s dominant chain is Smiles Dental, which enjoys the heavyweight backing of UK group Oasis Healthcare after its sale for a reported €36 million in 2014.

Smiles Dental lists 23 clinics on its website, making it an obvious competitor both for acquisition targets and for customers’ trade.

However Davitt said Smiles’ approach was more “high-street retail”, while Dental Care Ireland was targeting the “local, family dental practice”.

“I don’t tend to focus on the competition. I think we have a particular niche and reputation now, which we’ve established in the dentist community, and that’s not easy to do. The market is big enough for different forms of dentistry,” he said. 

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