Healthcare organisation Simplyhealth has acquired provider of dental payment plans and dental employee benefits, Denplan.
The acquisition will help Simplyhealth to gain market presence in a complementary area of healthcare, supporting its broader diversification strategy which has recently involved the acquisition of Groupama Healthcare.
Des Benjamin, chief executive officer of Simplyhealth, said: “Over the past ten years, Simplyhealth has been on a path of growth and diversification. By joining with companies that share common values, we have been building a strong organisation based on mutual values that will help people now and in the future.”
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Steve Gates, managing director at Denplan, said: “We are confident that we will benefit from the fact that Simplyhealth is solely focused on health, as well as being a UK based organisation based on mutual principles, which shares the same values and ethos as Denplan.”
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£115m purchase price vs £14m profit. In simple arithmetic terms an 8 year payback, if current profitability sustains.
Denplan had two major high points
– 1986 first mover advantage when founded in 1986 by two dentists
– 2006 NHS revision of dentists contracts resulting in flight to private care.
– 2010 despite major marketing activity membership fell by 50,000
– Revisions to NHS dentists contracts meant many NHS dentists could earn more by remaining with the NHS, so private practice transfers declined significantly
– However, cost cutting due to organisational bureaucracy in a relatively under competed market offer around 20% gains