3 Reasons to Sell Your Large Practice or Group Today

(or wait 4+ years to attain the same after-tax benefit)

When demand exceeds supply, prices go up. Today, demand from DSOs and Private Equity Groups (PEGs) far exceeds supply for dental practices and dental groups.  On all deals we have taken to market in 2021, we have noticed a remarkable phenomenon: we have more aggressive bidders than ever (more than 2019) and higher offers than we ever thought attainable.  Below are some real examples of what our clients are experiencing:

2020 M&A Year In Review

As 2019 ended, the M&A markets in the DSO markets were white hot.  Every deal that we took to market enjoyed multiple bids and our clients were continually awarded extremely lucrative valuations for their businesses.  The buy-side was voracious: there were more buyers than ever and new ones appearing every day willing to pay more and more to enter the DSO space.  The debt markets were strong, the money was cheap, and lenders were clamoring for deals.  It was truly a sellers’ market and the valuations kept creeping higher and higher.

Internally, our plan was to scale the business as we were picking up more and more mandates on the sell-side and saw an ever-deepening pool of investors and buyers.

“Everyone has a plan until they get punched in the mouth”

Mike Tyson

Top 3 (not so) Obvious Reasons to Engage TUSK as Your Sell-Side Advisor

As you all know by now, there are more buyers for dental practices in the market than ever before. Additionally, the value of your practice or group is likely as high as it ever has been (and ever will be). And finally, it would shock me if anyone who is reading this blog (and owns a group or large practice) has NOT received an unsolicited offer from a buyer.

Dad’s Story...

Around 2008, my father, Dr. Ben Cumbus, a pediatric dentist from Montgomery, AL, was looking to sell a portion of his practice to an associate. Leading up to that decision to sell, my father worked diligently as a solo doctor each week for over 30 years to serve our city’s children to meet their oral healthcare needs. Although the practice had a humble beginning in a small office park, he moved the business to its permanent location in a beautiful standalone building with a caboose on the front that served as a waiting room for the kids. Over the years, his team and business grew, and the practice (and the caboose) became a bit of an icon in the city.

Whew – what a year! 2019 was a whirlwind of activity at TUSK and in the DSO economy. We saw a significant amount of change, growth, M&A activity and new entrants into the market that it is hard to keep track of. Before we dive into 2019, let’s reflect on how the year started by looking at how 2018 ended:

- We saw transformational growth of some of the enterprise level DSOs including Heartland and Pacific Dental both adding 100 practices or more and NADG growing the number of affiliated practices by 49% in just one years’ time.  New doctor-founded, debt-funded groups were popping up on our radar regularly.

- Attendance at almost all DSO conferences were up big – interest in the space was growing.

- We were getting a call from a new Private Equity Group interested in the DSO space a couple of times a month.

- At TUSK, we sold more practices than ever before, across all specialties at multiples well above our client’s (and frankly our expectations) and worked with well over 70 groups to help them START, GROW or SELL their practice or group.

FOR IMMEDIATE RELEASE: January 9, 2020

Kevin Cumbus

TUSK Partners

718-314-0980

Kevin@tusk-partners.com

TUSK Partners Releases New Podcast Series

New Content Format Promises to Increase Audience Reach

Charlotte, NC: Today TUSK Partners announced the release of a new Podcast series called “Group Dental Practice Fundamentals,” which addresses the entrepreneurial dentists who are looking to learn more detail about how to grow and exit their business. “Group Dental Practice Fundamentals” complements the company’s educational content-driven marketing strategy and is expected to make an impact in the areas of new audience outreach. The doctor-founded, debt-funded group practice segment is the fastest growing sector of the entire dental economy and the company has earned a reputation for their detail-oriented marketing philosophy.

I have been in the business of valuing and selling dental practices since 2007. Over that time a lot has changed. 

In 2007, I joined well-established dental practice valuation and transition company. We worked exclusively with dentists to help them establish a value for their business for the purposes of either a 100% sale or for a buy-in from the associate or future partner. Our valuation process was always the same. We would request a stack of documents, including tax returns, P&Ls, historical production and collections reports, and payer by source reports. In return our client would mail us 7-11 inches of paper to wade through. We would pour all of this data into a financial model and turn it into information. Next, we would work with the doctor to establish the net income from the business then perform 7 intricate valuations methodologies and weigh each one based on various qualitative aspects of the business. It was a thorough and rigorous process that took days to complete.

In our last two blog posts, we talked about having “the End in Mind," more specifically being financially-oriented as related to an exit strategy, delved into personal objectives - contrasting topics of lifestyle and income versus effort and wealth, and finally looked at the operational considerations around the structures of the business itself.

We saved arguably the best for last…