After a slow 2022 driven by increased interest rates, we experienced some normalization in Dental M&A in 2023.  Here are four trends from 2023 that will impact 2024 deal activity:

• Significant Portion of Buyside Remains “Pencils Down”
• New Platforms Being Formed to Replace Nonactive Buyers
• Buy-Side is Being Much More Selective
• Deal Structures Vary Widely

I Will Buy Your Business for 25x Your EBITDA...

Offers from DSOs come in all shapes and sizes.  They contain a litany of terms, variables, vocabulary and numbers.  Yes, there is a “headline number” or “Enterprise Value” near the top of the page, but the reality is that many will never realize that headline number due to the structure of the deal.  Structure drives the long-term value of a transaction.  As I have said many times, “I will happily buy your business for 25x, IF you let me structure the deal.”  If you took me up on this offer, on a $1M EBTIDA business ($25M Enterprise Value on 25x EBITDA), I would set aside $1M of cash at close then structure the remaining $24M in unattainable earn outs, but you could tell all of your friends that you got paid 25x for your deal.  See where I am going?