What is the state of the dental market?

With no market closures, the market grew by over 30% in 2021, reaching 3.4 billion lei

Article published in the print edition of Ziarul Financiar on 19 August 2022

Author: Georgiana Mihalache

The turnover of the top 20 players by revenue accounts for just 14% of the total generated by the dental market in 2021

♦ In 2021, the market returned to growth after dental practices were closed for two months in 2020 at the start of the pandemic.

The dental market in Romania grew by over 30% in 2021 compared to the previous year, reaching a cumulative turnover of 3.4 billion lei for the nearly 8,000 companies operating in this sector, according to public data.

This growth comes against the backdrop of 2020 being a difficult year for the dental sector, with dental clinics closed for two months during the state of emergency caused by the pandemic. This affected businesses in the industry, but investment has picked up pace again, and the top players have continued to expand.

Thus, after a year of stagnation in 2020, the market resumed the growth rate seen in previous years, even outpacing the private healthcare sector, which has been extremely dynamic in recent years.

However, the dentistry segment remains fragmented, and the top 20 players by turnover in 2021 account for just 14% of the market by value, with combined turnover of nearly half a billion lei. In total, nearly 20,000 dentists work in dental practices, but the polarisation within the medical sector is also evident in dentistry, with most practices being established in urban areas.

This translates into poorer access in rural areas, where, according to market data, there is one dentist for every 4,000 inhabitants. In urban areas, the ratio is one dentist per 580 inhabitants, which highlights the gap between the two environments. The dental market is predominantly private, with only a few dozen public practices, usually in schools. Indeed, Romania ranks last in the European Union in terms of dental visits, according to Eurostat data.

What the dental sector looks like

The development of operators in this sector has not taken place in an integrated manner, within groups. Only among companies with higher turnover has there been an attempt at consolidation, and operators have opened several clinics in major cities across the country.

The largest player by turnover is DENT ESTET, with 15 clinics in eight cities across the country. At group level, DENT ESTET exceeded 107 million lei in turnover in 2021, an increase of almost 60% compared to the previous year. The foundations of DENT ESTET were laid in 1999 by dentist Oana Taban, the company’s founder and shareholder. In 2016, the majority stake of 60% was acquired by MedLife, the largest player in the private healthcare market.

The second-largest player in the dental market is Implant Expert, the company under which the Dr. Leahu brand operates, developed by Dr Ionuţ Leahu. The private dental operator’s turnover stood at 100.7 million lei last year, up 70% on 2020.

Third place in the market is held by the Dr. Dobrea brand, which comprises two clinics in Bucharest and Iaşi, with spectacular business growth from 1.8 million lei to over 28 million lei.

Appetite for investment

Over the past two years, the dental market has also attracted the attention of private equity investors, who have acquired businesses in this sector to develop them.

For example, in 2021, the investment fund EquiLiant Capital, founded by the Pavăl brothers, owners of Dedeman – Romania’s most successful entrepreneurial venture – acquired a minority stake in the Clinica Victoria dental clinic network, a business with a presence in Pitești, Râmnicu Vâlcea and Slatina.

In early 2022, private equity firm Abris Capital Partners announced the acquisition of Dentstore, a Romanian distributor of dental products, which generated turnover of €40 million in 2021. This is the investment fund’s third acquisition in the dental market in the last three years; it had previously acquired Dentotal, one of Romania’s largest distributors of dental products, as well as Dentatechnica, a distributor of dental products in Bulgaria.

Source: https://www.zfcorporate.ro/pharma/arata-piata-stomatologie-perioade-inchidere-piata-crescut-peste-30-21096624