Selling a Dental & Medical Practice to a Private Equity Firm

Selling your dental or medical practice to a private equity firm can unlock significant financial rewards and streamline operations through professional management. Private equity buyers are investors interested in acquiring well-performing dental and medical practices, especially those with strong financial metrics and growth potential. In recent years, the healthcare industry has seen a growing trend of private equity investment, with increased interest in medical and dental practices as attractive opportunities. Triumphant Partners, a seller-only advisory firm with over 100 + years of combined experience, is committed to serving your interests—maximizing value, ensuring a smooth transition, and preserving your legacy.

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The Role of Private Equity in the Dental Industry

Private equity firms have become major drivers of change in the dental and medical industries, investing heavily in dental and medical practices, as well as Dental Service Organizations (DSOs) and Management Service Organizations (MSOs), to accelerate growth and boost profitability.

By injecting capital and leveraging their business expertise, private equity firms help practices scale operations, streamline processes, and achieve greater operational efficiencies. This partnership can provide dentists and physicians with access to advanced resources, proven strategies, and extensive networks, all of which can enhance patient care and support the growth of their businesses.

However, while the benefits of private equity involvement are significant, such as increased financial security and the ability to drive growth, dentists and doctors must also consider the potential impact on clinical autonomy and the introduction of new management styles.

The financial implications of private equity investment can be substantial, affecting everything from daily operations to long-term strategic planning. As private equity continues to shape the healthcare industry, it is essential for dentists and medical practitioners to thoroughly evaluate both the opportunities and challenges, ensuring that any partnership aligns with their values, goals, and commitment to quality patient care.

What Are Private Equity Firms and Why Sell to One?

Private equity firms are investment entities that acquire businesses, including dental and medical practices, to enhance their value and resell them for a profit. As private equity buyers, they seek well-performing practices with strong financial metrics and growth potential. Selling to a private equity firm appeals to potential sellers who are interested in high payouts, professional management, or a quick exit. Private equity buyers are a subset of these potential buyers, often targeting high-growth practices. With dental and medical practice acquisitions on the rise, Triumphant Partners helps you determine if this aligns with your goals, matching you with firms—also known as PE firms—that respect your practice’s foundation and culture.

How Much Will a Private Equity Firm Pay for My Practice?

The offer is based on an EBITDA multiple, depending on revenue, profitability, and market potential. Private equity firms value scalability and patient growth, focusing on maximizing enterprise value during acquisitions. Triumphant Partners conducts a detailed valuation, analyzing financials and industry trends, with a critical emphasis on reviewing accurate financial statements, and negotiates to secure a top-tier offer, ensuring your practice’s worth is fully recognized in these transactions.

How Can I Sell My Dental or Medical Practice to a Private Equity Firm?

The transaction begins with Triumphant Partners assessing your practice’s value, emphasizing assets like a strong patient base, brand and efficiency systems. Selling a practice is a complex transaction involving multiple steps, including valuation, negotiation, and due diligence, each of which can significantly impact your practice’s operations and ownership. We then connect you with private equity firms from our network that match your goals. During negotiations, we advocate for terms that protect your interests and those of your organization only.

We manage due diligence, valuation, buyer partner procurement, leases, patient credits, liens, and closing, often within 60-90 days, tailoring the timeline to your needs as a seller. Our team of experienced professionals guides you through every stage of the transaction.

How Much Can I Sell My Dental or Medical Practice For?

Triumphant Partners utilizes exclusive Triumphant patented market data and your practice’s specific details to find the range, then negotiates to surpass the initial bids. Another key benefit of working with Triumphant Partners is leveraging our expertise to maximize your sale price and achieve the best possible outcome. We ensure you understand value drivers, such as patient retention, branding, opportunities for cash flow growth, and modern tech or equipment, to maximize your return.

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How Do I Estimate the Value of My Dental or Medical Practice?

Valuation involves reviewing revenue, net profit, patient retention, payor mix, interest rates, procedure mix, membership plans, staff tenure and raises, a detailed and thorough analysis of your General Ledger’s, benefits and online reputation. Having a clear strategy is essential for accurate valuation. Triumphant Partners utilizes income, market, and asset-based methods, analyzing financial statements and comparable data. Navigating the economic world of practice sales requires specialized knowledge. We also assess goodwill and staff, providing a solid estimate that strengthens your negotiating stance with private equity firms looking to invest in practices with strong valuation metrics.

Equity Firm Involvement:  What to Consider

When evaluating a potential partnership with a private equity firm, owners should take a comprehensive approach to ensure the right fit for their practice. Start by researching the private equity firm’s proven track record in the dental industry—look for a history of successful investments and positive outcomes for practices similar to yours. Assess the firm’s management style and operational approach, as these will directly influence your day-to-day experience and the culture of your practice.

It’s also crucial to consider how the firm’s strategic planning and financial targets align with your own long-term goals and values. Will you retain decision-making authority over clinical matters, or will there be new protocols that could impact patient care? Understanding the firm’s expectations for growth and profitability, as well as their approach to supporting dentists and doctors, will help you make informed decisions. By carefully evaluating these factors, you can ensure that any equity firm partnership supports your vision for the future of your practice and upholds the standards of care your patients expect.

What Happens to Staff When a Practice Is Sold?

Staff transitions are key—private equity firms retain your team to maintain operations and efficiency. Triumphant Partners negotiates to prioritize staff retention, preserving your practice’s culture. We help ensure a smoother transition for staff by developing comprehensive transition plans that minimize disruption and support your team, which helps retain patients during the change. We work closely with both sellers and buyers to support staff throughout the transition process.

DSOs and MSOs and the Dental and Medical Industry: An Alternative to Private Equity

Dental Service Organizations (DSOs) or Management Service Organizations (MSOs) present a compelling alternative for dentists or physicians seeking support without fully relinquishing control to private equity firms. DSOs and MSOs provide non-clinical support services—such as marketing, HR, billing, and IT—allowing dentists and physicians to focus on patient care while benefiting from the resources and expertise of a larger organization. This model can help practices achieve operational efficiencies and access advanced technologies, all while maintaining a degree of clinical autonomy. When considering a DSO or MSO partnership, it’s important to thoroughly evaluate the terms of the agreement. Pay close attention to management styles, fee schedules, and the extent of decision-making authority you’ll retain. Understanding the DSO or MSO model and how it aligns with your values, their track record, and goals will enable you to make informed decisions about the future of your practice.

For many dentists and doctors, DSOs or MSOs offer the best of both worlds: the ability to focus on patient care while leveraging the support and scale of a larger organization.

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Preparing for the Sale:  What to Expect

Preparation includes organizing financial statements, upgrading equipment, maintaining production, retaining key team members, and optimizing workflows. Triumphant Partners provides guidance and checklists to make your practice attractive to potential buyers, such as private equity firms, family offices, investors, MSOs or DSOs. Positive feedback from clients (patients) can further enhance your practice’s appeal to buyers. We also assist with post-sale planning, whether you’re retiring or transitioning, ensuring a complete process.

Industry Trends

The Future of Dental and Medical Practice Sales

The healthcare industry is undergoing rapid growth and transformation, fueled by increased involvement from private equity firms, MSOs, and DSOs. This trend toward consolidation is creating new opportunities and challenges for dentists and doctors considering the sale of their practice. Emerging business models, advances in technology, AI, and evolving patient expectations are reshaping the market landscape.

Staying informed about these industry trends is essential for making strategic, informed decisions about your practice’s future. Whether you’re exploring private equity partnerships, considering DSOs or MSO affiliations, or choosing to remain independent, it’s important to align your decisions with your long-term goals, core values, and commitment to patient care. By staying attuned to the market and adapting to change, dentists and physicians can position themselves for continued growth and success in the dynamic world of dental and medical practice sales.

Negotiating the Best Deal

Negotiation is critical for a strong outcome. Triumphant Partners advocates for terms that maximize your payout, protect your legacy, and address you and your staff’s needs. Our private equity, DSO, and MSO expertise ensures competitive offers and a deal aligned with your goals. You may also consider structuring the sale as a joint venture, where both the seller and buyer share ownership, profits, and operational control, often with profit-sharing and performance-based payment terms.

After the sale, the practicing dentist can retain an ownership stake and continue to benefit financially through profit-sharing arrangements, depending on the structure of the transaction.

Closing the Sale and Beyond

Ready to sell your dental practice to a  private equity firm? Contact Triumphant Partners  for expert, seller-only support.

Closing is the final stage in a series of transactions, involving legal reviews, contract signing, lease reassignment, patient credit clean-up, and transition planning. Over the last decade, private equity involvement in healthcare practice sales has increased significantly, with some of the largest DSOs and MSOS acting as active buyers in the current market. Triumphant Partners handles every detail for a seamless transition to the private equity firm. Post-sale, we provide support for adjustments like phased exits, ensuring you’re ready for your next phase with confidence. We have Private Equity, Buy-Side and Investment Banking experience to represent you.

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