Selling a Dental Practice to a DSO

State of the Dental Industry

The dental industry is rapidly evolving, shaped by technological advancements, shifting patient expectations, and increased competition. Dental practices are at the heart of this transformation, with practice owners facing new challenges and opportunities as they strive to deliver exceptional patient care while managing the complexities of running a business. As the landscape becomes more competitive, many dental businesses are turning to Dental Service Organizations (DSOs) for support.

DSOs offer a business model that relieves dentists of administrative burdens, allowing them to focus on clinical excellence and patient relationships. This shift is redefining how dental practices operate, making it essential for practice owners to stay informed and adaptable. By understanding the changing dynamics of the dental industry and the role of DSOs, dentists can make strategic decisions that ensure the continued growth and success of their practices.

How Much Will a DSO Pay for My Practice?

The price a DSO offers depends on several factors, including annual revenue, market, active and new patient retention, payor mix, procedure mix, profitability, and the overall practice level. DSOs use an EBITDA multiple (Earnings Before Interest, Taxes, Depreciation, and Amortization) to determine the sales price, though offers can vary widely based on location and practice specialty. Practices with substantial EBITDA are more likely to attract higher offers and command a greater practice value.

Triumphant Partners conducts a thorough valuation, analyzing your financials and market trends, and negotiates to secure the highest possible offer. Through effective negotiation, it is possible to achieve a substantial premium over initial offers, ensuring you’re compensated for both tangible assets and goodwill and maximizing your practice value in the sales process.

On average, Triumphant clients receive offers of 30% or higher (Total Enterprise Value) compared to those that come from direct mailers, solicitations, or less established brokerages and transition/advisory firms. Remember, buyers represent THEIR own interests ONLY.

How Can I Sell My Dental Practice to a DSO?

The steps involved in the sales process with Triumphant Partners are designed to maximize your outcome. First, we assess your practice’s value and readiness, identifying strengths such as a stable patient base or high provider productivity. Next, we match you with potential buyers from our extensive DSO network, receiving multiple offers to create a competitive environment and secure the best terms. During negotiations, we advocate for terms that protect your interests only, including selecting the right transition strategy—whether you wish to retire quickly, stay on, or maintain your practice’s legacy. We also focus on deal structure, ensuring you understand options such as rollover equity (Hold Co. equity) or retaining equity (Joint Venture), which can impact your long-term wealth and involvement post-sale. We then manage due diligence, ensuring all documentation is in order, and oversee the closing, often completing the sale in 60-90 days. Our seller-only approach ensures your timeline and priorities drive the process.

How Much Can I Sell My Dental Practice For?

The sale price varies based on revenue, growth potential, local demand, and the type of buyer—whether a private buyer, a DSO, or a private equity group. Triumphant Partners utilizes patent-pending technology to analyze your practice’s unique and exclusive data to provide a range for your practice’s value. We negotiate aggressively, securing offers above initial valuations, and ensure you understand what drives the Total Enterprise Value (TEV), including the projected return, especially in private equity or private equity firm-backed DSO transactions.

When evaluating offers, it’s crucial not to leave money on the table by undervaluing your practice or overlooking the differences between private buyers and institutional investors. This empowers you to make an informed decision about the value of your practice.

Every dollar Triumphant’s tried and true patented approach uncovers on average is worth $5-12 dollars+ per your $11 dollar on the open market.

How Do I Estimate the Value of My Dental Practice?

Valuing your practice is the foundation of a successful sale. Key metrics include gross revenue, net profit, patient and team retention, new patients per month, equipment age, and operational assets such as practice management software. Triumphant Partners employs a detailed approach, reviewing financial statements, tax returns, and market comparables. We also consider intangible assets, such as your reputation, staff expertise, practice philosophy, management style, and the overall identity of the practice. This comprehensive valuation provides a solid starting point, enabling you to enter negotiations with confidence and clarity about the worth of your practice.

Do Dentists Sell Their Practices to DSOs?

Yes, many dentists sell their practices, often to DSOs, as a retirement strategy to secure more capital quickly, scale faster, reduce their management burden, or pursue new opportunities in dentistry. Sellers stay on for an agreed-upon term length after the sale, seeking a more hands-off role while continuing to practice, if they choose, or can continue chairside. DSOs are interested in acquiring practices as part of their business development strategies, expanding their presence in the field of dentistry.

Triumphant Partners has a proven track record of facilitating these sales, always representing sellers exclusively. We guide you through the pros and cons, ensuring the sale aligns with your financial, personal, and professional goals. Whether you’re stepping away or transitioning to a partnership, we secure a deal that honors your years of hard work and legacy. We have represented clients in over $1 billion in Total Enterprise Value (TEV) transactions.

Preparing for the Sale:
What to Expect

Preparation is key to a successful sale. Triumphant gathers your financial records, evaluates equipment, leases, team tenure, raises, benefits, and addresses any operational inefficiencies.

Many DSOs reach out to practice owners through direct mail, so being prepared can help you respond effectively if you are interested in exploring their offers. NEVER let a buyer set the price. DSOs spend MILLIONS to direct market and only represent their interests. Their investors want to buy low and sell high. We ensure they go through a rigorous bidding process at your practice’s true value, so DSOs are kept honest and buy high, so they sell high for sizeable returns for you as a partner.

Triumphant Partners assists with this entire process, providing expert advice and experience to make your practice the most desirable to DSOs, especially those with robust infrastructure that offers comprehensive support and scalable growth. We also help you plan for life after the sale, whether that’s retirement or a new role, ensuring a holistic transition.

Negotiating the Best Deal

Negotiation is another aspect where Triumphant Partners shines, and the firm is recognized in the industry as the premier firm for negotiating on behalf of its clients’ best interests at top dollar. We advocate for terms that serve your best interest, maximize your payout, protect your legacy, and address staff and patient concerns. This includes negotiating earn-outs, non-compete clauses, transition support, and preserving your clinical autonomy as a key point of negotiation. Our experience ensures you’re not undervalued, leveraging our DSO network to create competitive offers and secure favorable terms.