Report on Dental Services Market


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A brief report on the dental services market in India, with key data for a major global countries
The reports gives the market size for dental clinics and dental labs in India, and expected growth rates. It also gives the market size for dental services in several major economies like USA, Japan, Germany, UK etc
The report lists global corporate dental clinic chains, as well as global dental labs. It also lists PE transactions in this space

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Report on Dental Services Market

  1. 1. Dental Services Market in India Sector: Healthcare Services Mar 2014
  2. 2. Index Market Size 3 Medical Data 11 Global Dental Data 15 Corporates in Global Dental business 20 2Indian Dental Services Market
  3. 3. Market Size Indian Dental Services Market
  4. 4. India’s dental opportunity 4 0 5000 10000 15000 20000 25000 30000 Maharashtra Karnataka TamilNadu AndhraPradesh Kerala Gujarat UttarPradesh Punjab Delhi Haryana Rajasthan WestBengal MadhyaPradesh Bihar J&K Assam Goa Uttarakhand HimachalPradesh Odissha Jharkhand Manipur Others 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
  5. 5. Concentration varies widely 5 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Goa Kerala Karnataka Maharashtra Delhi TamilNadu Punjab AndhraPradesh Haryana J&K Gujarat HimachalPradesh Uttarakhand Manipur Rajasthan MadhyaPradesh Assam WestBengal UttarPradesh Bihar Jharkhand Odissha Population Per Dentist From a low of 1360 persons per dentist for Goa to close to 65k for Odisha All India average is around 9800 persons per dentist Indian Dental Services Market
  6. 6. Catchment Income affects dentist population 6 -10,000 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 - 50,000 1,00,000 1,50,000 2,00,000 2,50,000 3,00,000 3,50,000 Delhi Goa Kerala TamilNadu Punjab Maharashtra Karnataka Haryana AndhraPradesh WestBengal Gujarat Bihar UttarPradesh Uttarakhand Assam J&K HimachalPradesh Manipur MadhyaPradesh Rajasthan Jharkhand Odissha Income(Rs) 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
  7. 7. Data comparison within states 7Indian Dental Services Market 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%
  8. 8. Urban areas have high dentist concentration 8Indian Dental Services Market 0 500 1000 1500 2000 2500 3000 3500 4000 4500 0 1000 2000 3000 4000 5000 6000 7000 Mumbai Pune Nashik Nagpur Bangalore Chennai Madurai Coimbature Hyderabad Vijayawada Ahmedabad Surat Vadodara Rajkot Kochi Select City Data Dentists Pop/Dentist
  9. 9. Deriving Market Opportunity 9Indian Dental Services Market • 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)
  10. 10. Growing dental education sector suggests underlying demand growth 10Indian Dental Services Market 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
  11. 11. Medical Data Indian Dental Services Market
  12. 12. High Prevalence of dental caries shows growth potential 12Indian Dental Services Market 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 Bangalore As income increases, treatment rate will increase, creating positive elasticity with GDP growth
  13. 13. 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 13Indian Dental Services Market
  14. 14. 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 14Indian Dental Services Market
  15. 15. Global Dental Data Indian Dental Services Market
  16. 16. Dental Clinic business in the US: $167bn by 2015 16Indian Dental Services Market This shows Indian data, which shows incidence > 60% is correct India’s 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
  17. 17. Dental Clinic business – other countries 17Indian Dental Services Market China’s dental services market 6-7x larger than India Population 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 • China’s 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
  18. 18. Global Dental Lab Business: $14.5bn 18Indian Dental Services Market 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
  19. 19. US Lab business is consolidating 19Indian Dental Services Market 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 What’s 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
  20. 20. Corporates in Global Dental Business Indian Dental Services Market
  21. 21. Dental Clinic Chains - USA 21Indian Dental Services Market 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 Feb’12 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
  22. 22. Dental Clinic Chains - USA 22Indian Dental Services Market 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
  23. 23. Dental Clinic Chains - USA 23Indian Dental Services Market Brighter Dental Care • Small regional dental chain, with 13 outlets • Was acquired by Topspin LBO and AUA Private Equity in May’12 Great Expressions Dental Centers • 40 year old chain, with over 150 outlets • Acquired by PE firm Audax in 2008
  24. 24. Dental Chains - EU 24Indian Dental Services Market Integrated Dental Holdings, UK • Europe’s 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 • UK’s 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 Aug’10
  25. 25. Dental Chains - Asia 25Indian Dental Services Market 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.
  26. 26. Dental Clinic Chains - ANZ 26Indian Dental Services Market 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 Dec’12, valuing the company at ~1.25x sales 1300 Smiles Ltd - Australia • Listed on the Australian Stock Exchange since 2005 • Australia’s 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
  27. 27. Dental Clinic Chains - ANZ 27Indian Dental Services Market 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
  28. 28. Global Dental Labs 28Indian Dental Services Market 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
  29. 29. Global Dental Labs 29Indian Dental Services Market National Dentex Corporation, USA • Founded in 1982, claims to be USA’s 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
  30. 30. Global Dental Labs 30Indian Dental Services Market 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
  31. 31. Global Dental Labs 31Indian Dental Services Market 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
  32. 32. PE owned/invested dental clinics chains 32Indian Dental Services Market 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
  33. 33. PE owned/invested dental labs 33Indian Dental Services Market 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
  34. 34. Disclaimer 34 Copyright© 2014 India Business Reports • All rights reserved. No part of this publication may be reproduced or utilized, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of India Business Reports (“IBR”) Legal Notices and Disclaimer • None of IBR, its partners, employees, affiliates, representatives or advisors make any representation or warranty, expressed or implied, as to the accuracy or completeness of any of the information contained herein, including any opinion or any other written or oral communication transmitted or made available. Each recipient of such information expressly disclaims any and all liability relating to or resulting from the use of such information and communications by a recipient or any of its affiliates, advisors or representatives. In particular, no representation or warranty is given as to the achievement or reasonableness of any future projections, estimates or statements about the future prospects of any of the companies. • This document is for the use of the persons who receive it directly from IBR. Recipients agree that all of the information contained in it is of a confidential nature, and that they will not, directly or indirectly, disclose any such information without the prior written consent of IBR. Confidentiality • In consideration of you receiving a copy of this document, you agree to keep confidential the contents of this document and shall not, without the prior written approval India Business Reports (“IBR”) disclose to any person the whole or any part of the information contained in, or associated with this document. Indian Dental Services Market
  35. 35. Thank You Indian Dental Services Market