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www.indiabusinessreports.com
Dental Services Market
Sector: Healthcare Services
Mar 2014
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Index
Market Size 3
Medical Data 11
Global Dental Data 15
Corporates in Global Dental business 20
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Market Size
www.indiabusinessreports.com Indian Dental Services Market
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Indias dental opportunity
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Oth
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Dentist Population -Statewise
105,000 dentists registered with Indian Dental Association.
Total practising population believed to be 125K
Market size believed to be ~Rs. 5-6000 crore, at an average
income of Rs 4-5 lakh/annum or about Rs 40-50K per month
Indian Dental Services Market
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Concentration varies widely
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10,000
20,000
30,000
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Go
a
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Population Per Dentist
From a low of 1360 persons per dentist for Goa to close to 65k
for OdishaAll India average is around 9800 persons per dentist
Indian Dental Services Market
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Catchment Income affects dentist population
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10,000
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Del
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Inco
me
(R
s)
Catchment versus Per Cap Income
Per Cap Income Pop/Dentist
As per capita income doubles, population per dentist falls by
half (negative correlation of 0.52)
Indian Dental Services Market
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Data comparison within states
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10 states with lowest pop/dentist
Average per Capita ncome (Rs/annum) 1,12,840
Average pop / dentist 7,374
Total Income of catchment (Rs cr) 765
Area of catchment (sq km) 17
10 states with Highest pop/dentist
Average per Capita Income (Rs/annum) 52,336
Average pop / dentist 26,594
Total Income of catchment (Rs cr) 1,481
Area of catchment (sq km) 115
Top 10 states with highest dentist concentration have: Per
capita income 2.2x lowest 10 Average population per dentist around
28% of lowest 10 Catchment area is 15%
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Urban areas have high dentist concentration
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Select City Data
Dentists Pop/Dentist
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Deriving Market Opportunity
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Total income of catchment half of the low income states.
Implies higher propensity to spend in more prosperous states
Also implies spend on dental services likely to rise faster than
GDP
Nominal GDP grew ~13.5% over FY01-13.
Dental market can be expected to grow at min 15% over
FY13-18
This means the market will atleast double in 5 years
6,000 6,900
7,935 9,125
10,494 12,068
900 1,035 1,190 1,369 1,574 1,810
FY13 FY14 FY15 FY16 FY17 FY18
Indian Dental Market Opportunity
Dental Clinic Market (Rs Cr) Dental Lab Market (Rs Cr)
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Growing dental education sector suggests underlying
demand growth
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State Colleges State Colleges
Karnataka 43 Bihar 7
Maharashtra 28 Himachal Pradesh 5
Uttar Pradesh 28 Chattisgarh 5
Andhara Pradesh 20 Orissa 4
Tamil Nadu 17 West Bengal 3
Kerala 17 Delhi 3
Punjab 12 Uttranchal 2
Haryana 11 Jammu & Kashmir 2
Rajasthan 11 Pondicherry 2
Madhya Pradesh 11 Goa 1
Gujarat 9 Assam 1
30,570 dentists graduated in 2010; dentist population could be
growing @15-20%Skewed geographical distribution of colleges; top 5
states have 56% of the colleges and top 10 states have 82% of
colleges
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Medical Data
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High Prevalence of dental caries shows growth potential
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Age Group Urban (%) Rural (%) Average DMFT*
5-6 yrs 67.23 46.22 56.72 2.1
12 yrs 57.94 36.9 47.39 1.6
15 yrs 55.97 43.28 49.59 1.37
30-35 yrs 45.21 39.27 42.24 1.39
60-75 yrs 79.40 61.90 70.65 -
Source: National Commission on Macroeconomics & Health;
Burden of Disease in India
* DMFT: Delayed, Missing and filled Teeth
Incidence of caries in people above 12 yrs is 55% in Delhi, 78%
in Mumbai, and 73% in BangaloreAs income increases, treatment rate
will increase, creating positive elasticity with GDP growth
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Dental disease prevalence & behaviour
DMFT score for teenagers could be still higher Around 35%
teenagers suffer from misaligned teeth and jaws Nearly 70% people
suffer from some dental problem As per WHO estimates, incidence of
edentulousness (missing
teeth) among Indians is over 20% According to National Oral
Health Survey (by Dental Council of
India), gum diseases (Periodontal diseases) are prevalent in
67.7% of 15 year olds and as much as 89.6% of 35-44 year olds.
60% have never visited a dentist Over 50% not concerned about
preventing or curing dental
problems Almost 30% do not use any oral care product
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Key highlights of a dental incidence survey
According to a survey conducted by Synovate (a research agency)
and sponsored by Colgate: 74% aware of the prevalence of cavities,
but 63% are
unconcerned 76% aware of the prevalence of stained teeth, but
66% are
unconcerned 78% aware of the prevalence of gum bleeding, but 63%
are
unconcerned 74% aware of the prevalence of swollen gums, but 66%
are
unconcerned
Survey also revealed that 24% of consumers suffered from
toothache in the past one year; 96% were aware of the problem; only
35% have taken treatment from a dentist
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Global Dental Data
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Dental Clinic business in the US: $167bn by 2015
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This shows Indian data, which shows incidence > 60% is
correctIndias most developed state Goa has similar dentist
concentration
Size of the US dental industry was $71bn in 2002, and $94bn in
2007, having grown at a CAGR of 5.8%.
According to the U.S. Centers for Medicare and Medicaid, the
demand for dental services is predicted to increase to $167 billion
by 2015
US dental spends are around 4.3% of total medical spends
As of 2009, there were 186,084 professionally active dentists,
~1650 patients per dentist, average dentist earnings ~ $570K
Percent of children ages 2-17 with a dental visit in the past
year: 81.4% (2011)
Percent of adults ages 18-64 with a dental visit in the past
year: 61.6% (2011)
Percent of adults ages 65 and over with a dental visit in the
past year: 61.2% (2011)
Despite this, more than one in five people had untreated dental
caries
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Dental Clinic business other countries
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Chinas dental services market 6-7x larger than IndiaPopulation
per dentist is not vastly different though
Germany 83,339 practicing dentists (2008) 1237 patients per
dentist
Japan 99,426 practicing dentists (2008) 1280 patients per
dentist
China Chinas dental services market was believed to be around
$5-6bn in 2010 ~175K dentists, implying 7700 persons per
dentist
UK 2012 market estimated at 7 billion Growth drivers are
historic under provision compared to other European countries
and
the positive demographics of an ageing population requiring more
dental treatment
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Global Dental Lab Business: $14.5bn
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Global Outsourcing opportunity at 2x US number could be around
$3.2bn in 2012 numbers, or about 25% of the total market
The world market for dental laboratories is projected to exceed
$14.5 billion by the year 2015, according to a report by Global
Industry Analysts
US Data
The US lab market n 2012 was ~$4.4bn
7,042 dental laboratories in the United States with a payroll in
2012, another 3,000 one man dental laboratories. 33,600 domestic
dental technicians
Average revenue per lab appears to be $450K.
U.S. Food and Drug Administration import trade data shows around
$1.6 billion in dental laboratory related sales was fulfilled by
foreign dental laboratories in 2012. Some of it is getting directly
outsourced, from US dentists, so may not figure in US dental lab
data
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US Lab business is consolidating
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Outsourcing is the way forward; local technician population is
shrinking
The number of dental laboratories in the United States has been
steadily declining since 2008, dropping from approximately 12,000
to 7,050 dental laboratory businesses reporting a payroll in
2013
Whats driving consolidation
48% of laboratory owners are more than 55 years old and nearing
retirement age
Higher cost of set up; it takes a minimum $200K to setup a lab,
from $20K 15-20 years ago. The rise is due to higher dental
technology
ADA-accredited dental lab technology programs down 62 percent
since 1992. Today, there are 18 programs capable of producing only
300 technicians per year
Rising trend to regulate amongst US states. Four states have
labelled dental prosthesis as Class II medical devices (there was
no such classification earlier). More states expected to follow.
Higher regulatory pressure will hurt small labs
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Corporates in Global Dental Business
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Dental Clinic Chains - USA
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Aspen Dental
Founded in 1964 as a dental lab, started clinics in 1981.
Present in 433 locations
Acquired by PE Fund Leonard Green & Partners in 2009 for
$500mn from another PE fund Ares Management LLC, which bought Aspen
in 2006 for $91mn
Smile Brands Group Inc
Founded in 1998, now 1,300 in nearly 400 offices
Operates under the brands: Bright Now! Dental, Castle Dental and
Monarch Dental
Has changed hands between PE firms 3 times. Freeman Spogli
bought Smile Brands from Gryphon Investors in 2005 for about $340
million. In 2010, Freeman sold to Welsh Carson Anderson &
Stowe
American Dental Partners (ADP)
Founded in 1995, is among the largest US chains
Was listed on Nasdaq till PE fund JLL Partners acquired 100% in
Feb12 for $398 million
ADP was affiliated with 27 dental group practices, which have
282 dental facilities and about 2,400 operatories in 21 states at
the time of acquisition
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Dental Clinic Chains - USA
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ReachOut Healthcare America (RHA)
Started in 1997, specialises in mobile dental services,
providing dental care at schools, workplace and military
establishments
In 2011, coordinated dental care at 8,700 schools and
coordinated the processing of 488,000 children in those schools.
Handles 1.5 million patients annually
Acquired by Sentinel Capital Partners in 2007 (80% for $22mn),
sold to Morgan Stanley in 2010 at reported 6-7x gains
Kool Smiles
Founded in 2002, present in 100+ locations in the USA
In 2011, two million patients visited Kool Smiles clinics
Acquired by Friedman Fleischer & Lowe in 2004
Midwest Dental
75 clinics in 6 states
Acquired by Friedman Fleischer & Lowe in 2011
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Dental Clinic Chains - USA
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Brighter Dental Care
Small regional dental chain, with 13 outlets
Was acquired by Topspin LBO and AUA Private Equity in May12
Great Expressions Dental Centers
40 year old chain, with over 150 outlets
Acquired by PE firm Audax in 2008
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Dental Chains - EU
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Integrated Dental Holdings, UK Europes largest dental corporate
company Employs more than 2500 dental professionals in 550 dental
clinics, caters to 10 million
patients Owned by Carlyle and Palamon Capital Partners
Oasis Dental Care, UK UKs second largest chain with 202 outlets
FY13 revenue was 150 million, EBITDA 19mn Owned by PE fund
Bridgepoint, which acquired 100% for 219 million in 2013
Colosseum Dental, Norway Founded in 1986, Colosseum has clinics
26 clinics across Scandinavia Acquired by IK Investment Partners in
2010. In FY09, Colosseum had revenues of NOK
382 million and an EBITDA of NOK 38 million.
Swiss Smiles, Switzerland Small Swiss chain started in 2002,
also present in UK and India. PE fund EQT invested CHF 44 million
in Aug10
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Dental Chains - Asia
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Q & M, Singapore
Established in1996, now the largest private dental healthcare
group in Singapore, with 2012 revenue of around Rs 2.80bn, net
profit margin of 9%.
3 year CAGR of 24% for revenues
Listed, current market cap around Rs 9.35bn, PE of 33x , and
Price/Sales of 3.3x
52 clinics, 4 Dental Centres in Singapore, Malaysia. Starting to
build business in China. Has 10 clinics spread over Beijing,
Nanjing and Shanghai
Formed JVs with two Chinese Labs: He Cheng Yiwu and Shenzhen New
Perfect. Will invest S$25mn in these.
Plans 50 dental clinics and 20 dental laboratories in China by
2015.
Tokushinkai & World Lab Inc, Japan
Operates in 10 countries worldwide, including 41 dental clinics
and 13 technical centers, employs approximately 2,500 people
Owns World Lab Inc, a dental lab. World Lab has 7 centres 4 in
Japan, 2 in US, and 1 in China.
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Dental Clinic Chains - ANZ
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Dental Corporation Holdings
Largest chain of Australia and New Zealand
190 dental offices with more than 450 dentists
Revenues of A$339 million (US$357.3 million) in 2012
Fortis sold 64% stake in DCH to BUPA at an estimated A$270
million in Dec12, valuing the company at ~1.25x sales
1300 Smiles Ltd - Australia
Listed on the Australian Stock Exchange since 2005
Australias 4th largest dental chain with 25 units
Revenues of A$35m and net profit of A$6.4mn in FY13
Market cap ~ $164mn, quotes at 25x PE (trailing) and around 21x
one year forward
Over 4.5x trailing sales, and 4x likely forward sales
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Dental Clinic Chains - ANZ
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Abano Healthcare New Zealand
Listed on New Zealand Stock Exchange
Started in 1999, first as a diagnostics business, entered dental
in 2003
Entered Australian dental market in 2008, now the second largest
there
138 dental clinics, 75 in Australia
Revenue of $207mn, EBITDA $28mn and net profit $4.5mn in
FY13
Market cap of $115mn. Quotes at Trailing PE of 25x
EV/EBITDA of 7x
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Global Dental Labs
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Modern Dental Laboratory, China
Claims it is the largest Dental Laboratory in the world and
houses the largest dental technology school in the world.
Started in 1976, from Hong Kong.
Key production facility now in Shenzhen, China, over 3000
technicians
Has four distribution centres in US: Chicago, Los Angeles,
Seattle and Boston.
Glidewell Dental Laboratory
Established in 1970, based in California, USA
Invests in R&D, has patented products like BruxZir (zirconia
crowns) which are globally popular
Has more than 1000 employees
Veden Dental Laboratory
Australian Company
36 years in operation, 1300 technicians, has production in
Gaungdong, China
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Global Dental Labs
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National Dentex Corporation, USA Founded in 1982, claims to be
USAs largest dental lab business Believes having local
labs is a better idea than a large centralised facility. Has ~40
labs spread through USA, built largely through acquisitions Went
public in 1993 on Nasdaq, went private in 2010, when it got
acquired by GDC
Holdings Inc (in turn owned by PE fund Welsh, Carson, Anderson
& Stowe) for $100mn In 2010, had annual revenues of ~$160mn
Elysee Dental Founded in 2001, Elysee Dental operates in four
European countries
(Netherlands, Belgium, Denmark and Spain). One of the largest
dental laboratories in the world with approximately 2,500 employees
Has a parter lab in Asia where it outsources for cheaper production
PE fund Synergia Capital Partners invested in 2009
The Dental Services Group or Sentage Corporation, USA Founded in
1989, acquired by PE fund Bolder Capital, LLC in 2005 Has 26 labs
in United States, Canada and Mexico Serves 10,000 dentists with 800
technicians
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Global Dental Labs
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Flemming Dental GMBH, Germany
Founded in 1996,
1600 employees operating in 50 locations in Germany
Had a turnover of over 70m in 2009
Acquired by PE fund Auctus Capital Advisors AG in 2011
Swift Dental Group, UK
Founded in 1984. Operates from 6 sites in the UK
Has done 6 acquisitions over the years
New Perfect Dental Lab, China
13 laboratories in major cities with over 1,000 college
certified technicians
Q&M of Singapore bought 49% in 2010 for S$19.2 million
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Global Dental Labs
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Microdental Laboratories, USA / Canada Claims to be the fourth
largest dental laboratory in the world. Began as Total Management
Services Inc. (TMSI) in Alberta, Canada in 1994 Changed name to
Dental Technologies Inc. (DTI), went public on the Canadian
Venture
Stock Exchange in July, 1999 Acquired by PE fund
HealthpointCapital LLC in 2006 Serves 6,500 dentists in 50 states
and six countries. 15 sites and 700 employees throughout North
America
Novadent Inc, USA 9 labs and 350 technicians Owned by PE fund
Birch Hill Equity Partners
Dental Lab Holdings, LLC
Holding company formed by PE fund Beacon Bay Holdings to acquire
dental labs Has done 2 acquisitions: daVinci Dental Studios, a
nationally branded highly aesthetic
dental lab leader, and NuLIfe, a leading dental lab in the New
York metro area with implant expertise
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PE owned/invested dental clinics chains
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Dental Clinic Chain Fund
Aspen Dental, USA Leonard Green & Partners
Smile Brands Group Inc Welsh Carson Anderson & Stowe
American Dental Partners (ADP), USA JLL Partners
ReachOut Healthcare America (RHA) , USA Morgan Stanley PE
Kool Smiles, USA Friedman Fleischer & Lowe
Midwest Dental, USA Friedman Fleischer & Lowe
Great Expressions Dental Centers, USA Audax
Brighter Dental Care, USA Topspin LBO and AUA Private Equity
Integrated Dental Holdings, UK Carlyle and Palamon Capital
Partners
Oasis Dental Care, UK Bridge Point
Colosseum Dental, Norway IK Investment Partners
Swiss Smiles, Switzerland EQT
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PE owned/invested dental labs
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Dental Lab Fund
Elysee Dental , Netherlands Synergia Capital Partners
Sentage Corporation, USA Bolder Capital, LLC
Flemming Dental GMBH, Germany Auctus Capital Advisors
Microdental Laboratories, USA / Canada HealthpointCapital
LLC
Novadent Inc, USA Birch Hill Equity Partners
Dental Lab Holdings, LLC, USA Beacon Bay Holdings
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Disclaimer
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