The dental industry is undergoing a period of rapid consolidation, driven by an influx of private equity (PE) interest. This trend presents a unique opportunity for dentists who are considering selling their practices. In an on-demand webinar hosted by Becker’s, PTS Founder and President Kyle Francis and Lead Broker Stanton Kensinger discussed the key factors driving consolidation in the dental industry and how dentists can capitalize on this trend.

Key Takeaways from the Webinar

 – Consolidation is heating up: The dental industry is experiencing a surge in consolidation, with over 375 dental support organizations (DSOs) now operating in the United States. This trend is expected to peak soon, with dentistry reaching the full 60-70% consolidation within the next five years.

 – Private equity (PE) interest is driving consolidation: PE firms are increasingly viewing dental practices as attractive investments due to their resilience and stable returns. Dentistry offers a hedge against riskier assets in a PE portfolio, which is why the industry is currently attracting a large amount of private equity groups and institutional capital.

 – DSOs offer dentists more options: The rise of DSOs has created a wider range of exit strategies for more entrepreneurial dentists beyond the traditional 100% buyout. DSOs can offer dentists various partnership and affiliation models that allow them to retain a percentage of ownership as well as clinical autonomy in their practices.

 – DSOs benefit from economies of scale: DSOs can leverage their size, resources and capital to negotiate better rates with suppliers and insurance companies and help improve margins and efficiency, ultimately increasing profitability for affiliated practices

 – Time is of the essence: As consolidation progresses, the window of opportunity for dentists to maximize the value of their practices will narrow.

Types of DSO Deal Structures

There’s much more to consider than a simple sale when affiliating with a DSO. The good news is, with the influx of private equity driving a surge in DSO activity, deal structures are becoming more dentist-friendly, offering a wider range of options beyond just selling 100% ownership. This allows dentists to retain some control and share in the future growth of their practices. Here’s a breakdown of some common DSO deal structures discussed in the webinar:

 – 100% affiliation
 – Joint venture
 – Equity roll
 – Roll-up
 – Sub-DSO
 – Direct to private equity

Bottom Line

The dental industry is rapidly consolidating, and dentists who are considering selling their practices should not wait any longer to act. Listen to the webinar recording to learn directly from Francis and Kensinger and hear their insights on:

 – The latest trends in dental practice consolidation
 – The benefits of working with a DSO
 – The different deal structures available to dentists
 – How to maximize the value of your practice

Our team of experienced professionals can guide you through the entire sales process so that you receive the best possible outcome. By working with an experienced advisor like PTS, you can ensure a smooth and successful transition that maximizes the value of your practice.

Contact PTS today to schedule a free consultation and learn more about how we can help you capitalize on the consolidation trend in the dental industry before it’s too late.