Industry leaders in the dental products market continue to expand geographically, and increase scale through consolidation.
Over the past three years valuations have remained robust in the dental products industry. Public company multiplies have been tracking at 1.9x revenue and 16.0x EBITDA while recent transactions are currently tracking at 4.0x and 12.2x, respectively. Since mid-2013 our Dental Products Index has risen 77% compared to a 26% increase in the S&P 500.
New technologies and a rise in disposable income among the middle class are expected to drive growth in the global dental products sector. By 2019, the segment is forecasted to reach $55 billion at an annualized rate of 2.9%.1 Market leaders are actively making acquisitions to create robust product and service platforms. There has also been significant consolidation among these players.
Of particular note is Dentsply’s merger with Sirona Dental Systems which closed in late February 2016. The $5.4 billion merger combined Dentsply’s market leading dental consumables platform with Sirona’s dominant dental technology business. The consolidated company, Dentsply Sirona, will offer the most products and technological solutions within the global dental products market, and is expected to generate more than $125 million in cost-savings synergies over the next three years.