A dental practice owner in suburban Melbourne recently turned down a $2.8 million offer for a three-chair surgery. Two years ago, that same practice would have attracted offers around $1.6 million.
What changed? Not the practice. The buyer pool.
Private equity has arrived in Australian healthcare, and it’s reshaping what practices are worth — and how deals are structured.
The Roll-Up Wave
Groups like Pacific Smiles, Maven Dental, and National Dental Care have spent the last several years acquiring dental practices at scale. Similar roll-ups are underway in GP clinics, physiotherapy, veterinary, and allied health. The playbook is consistent: acquire practices at 5–7x EBITDA individually, consolidate operations, and create a platform valued at 10–15x by institutional investors.
This means that if your practice fits a roll-up strategy — right location, right size, retainable practitioners — you may attract multiples that would have been unthinkable five years ago.
| Practice Type | Typical EBITDA Multiple | What’s Driving Demand |
|---|---|---|
| Dental (multi-chair, metro) | 5x – 9x | PE roll-ups, high barriers to new entry |
| GP clinic (multi-doctor) | 5x – 8x | Chronic undersupply, Medicare revenue floor |
| Allied health (physio, OT, speech) | 4x – 7x | NDIS contract value, scalability |
| Veterinary | 5x – 8x | Greencross/NVA effect, pet ownership growth |
| Aged care / home care (NDIS/HCP) | 6x – 10x | Government-funded recurring revenue |
| Specialist medical | 4x – 7x | Highly practitioner-dependent |
The uncomfortable truth about healthcare valuations: your practice is only as valuable as the practitioners who stay after settlement. A GP clinic billing $2M through three doctors is worth very little if those doctors leave within twelve months. Every sophisticated buyer knows this, and deal structures reflect it.
The Practitioner Retention Problem
This is healthcare’s version of the professional services “client-follows-the-partner” risk, but amplified. Patients don’t just prefer their doctor — in many cases, they have genuine clinical relationships built over years. A patient with a complex chronic disease management plan isn’t going to cheerfully switch to whoever buys the practice.
Buyers manage this risk through:
- Practitioner employment contracts with 12–24 month terms and restraint clauses
- Earn-out structures tied to practitioner retention and revenue maintenance
- Equity participation — offering key practitioners a stake in the acquiring group
- Above-market compensation during the transition period
If you’re a solo practitioner planning to exit completely, expect a significant discount. If you have three or more practitioners and you’re willing to stay on for a transition period, you’re in a much stronger position.
Medicare Mix: Why Your Billing Profile Matters
Not all healthcare revenue is equal. Buyers scrutinise the split between Medicare/bulk billing and private fees:
Bulk billing revenue provides a government-guaranteed floor — it’s predictable but lower margin. Practices in lower-socioeconomic areas that bulk bill 90%+ may have thinner margins but more defensible revenue.
Private billing and gap fees drive margins. A practice that successfully charges gap fees demonstrates patient willingness to pay and pricing power. Mixed billing practices (60% private / 40% Medicare) often attract the highest valuations because they combine margin with a revenue floor.
NDIS and aged care contracts are currently among the most valuable assets in healthcare. Home Care Package providers and NDIS-registered providers with established participant bases are attracting strong multiples because the revenue is government-funded, recurring, and growing as the population ages.
Location, Lease, and Fit-Out: The Physical Reality
Healthcare businesses are physically rooted in a way that most businesses aren’t. You can’t relocate a dental surgery to cheaper premises without losing patients and spending $500,000+ on a new fit-out.
What buyers evaluate:
The lease. A minimum of 5 years remaining (including options) is expected. Anything less creates uncertainty about whether the practice can continue operating from its current location. Buyers will often make an offer contingent on securing a new lease or extension from the landlord.
The fit-out. Dental surgeries typically cost $150,000–$200,000 per chair to fit out. Medical practices with procedure rooms, allied health practices with hydrotherapy pools or specialised equipment — all of these represent significant capital that’s largely unrecoverable if the practice moves. A modern, well-maintained fit-out adds real value. An ageing fit-out becomes a negotiation point.
The location. Population growth corridors, proximity to complementary services (a physio practice near a sports precinct, a GP clinic in a medical hub), and local competitive dynamics all factor in. A practice in a growing outer suburb with limited competition may be worth more than a higher-billing practice in a saturated inner-city area.
Accreditation: Table Stakes, Not a Value-Add
AGPAL or QIP accreditation for general practices isn’t a selling point — it’s a minimum requirement. Buyers expect it. What they actually look at is whether any accreditation conditions or recommendations are outstanding, and whether clinical governance records are clean.
For dental, compliance with Dental Board requirements and radiation safety standards is similarly expected. For NDIS providers, maintaining registration and audit compliance is non-negotiable.
What does add value: demonstrable quality metrics. Patient satisfaction scores, clinical outcome data, low complaint histories, and strong Practice Incentives Program (PIP) participation signal a well-run practice that’s likely to retain patients through a transition.
Positioning Your Practice for Maximum Value
The healthcare M&A market is active right now, but it won’t stay this heated forever. If you’re considering a sale in the next few years:
Secure your practitioners. Have honest conversations. Understand who wants to stay and who’s planning their own exit. Structure retention arrangements before you go to market — a buyer seeing unsigned practitioners will discount their offer.
Know your numbers by practitioner. Break down billings, patient volumes, and margins by individual practitioner. Buyers will do this analysis anyway — better that you do it first and can present it clearly.
Negotiate your lease early. If your lease is expiring within three years, approach your landlord now. A fresh 5+5 year lease dramatically improves your negotiating position.
Get your NDIS/aged care house in order. If you hold these contracts, ensure compliance is bulletproof. A single audit issue can derail a transaction.
Get an initial estimate of your practice’s value or contact us for a confidential conversation about your options in the current market.