An evolution of thoughts towards DSOs...
Over the past couple of years, I have been lucky to spend a lot of time with my father. We have been brought together as a family for celebrations and memorials (sadly) over the years. Each time we get together, he asks me about the ever-changing landscape in the DSO M&A markets. You see, my father is a pediatric dentist. He started his practice in 1976, grew the practice to a multi-doctor single location, saw 100+ children a day in the summertime, and ultimately sold his practice to his associate about 7 years ago. Over the course of my 14-year career in the business of dentistry, my father and I have always talked shop.
Over the years, I have held many jobs and started various companies to serve dentists. As I began to focus my career on the DSO space, dad was leery of all DSOs, especially those I worked within the early years. In 2011, when I went to work for a 180+ PE-backed DSO, dad was less than pleased. My father, like most dentists I knew at that time, viewed DSOs as the enemy. DSOs were relatively new and represented a very small but rapidly growing segment of the market.
When I started my first DSO consulting business in 2014, I sat down with him to help him understand the DSO space’s new trend: the doctor-founded group. Dentists took control of their destiny and began creating regional groups to scale and (potentially) sell to larger DSOs or Private Equity Groups. Strangely, DSOs were primarily focused on general dentistry, and specialists were, at that time, relatively insulated from the consolidation (and valuations) that came from partnering with a DSO. In 2015, one short year later, Smile Doctors was founded with a clear message to partner exclusively with orthodontists throughout the nation. This was the seismic shift in the specialist world! Yes, there were plenty of other groups that partnered with specialists but none with the capital, leadership, and focused commitment.
Today, there are over 20 groups that we know of that are focused exclusively on specialist groups. They are paying more than ever for each group that we bring to market.
Join us for our Specialists Market Update Webinar on April 13th, 2021 to learn more:
Specialist groups and large practices are now the most desirable assets in the DSO space. They trade at higher multiples today than ever before. We at TUSK have had the pleasure of working with specialists throughout the nation. We have delivered exceptional results for our clients that resulted in life-changing wealth events for them and their families (all of the specialists practiced and groups we have represented, sold at north of 160% of collections and one at over 700% of collections). Below are a couple of examples of recent activity in the market:
To learn more about what is happening in the DSO space regarding market forces and valuation, get in touch with us directly by booking a call below:
I am with my father again this week. We are enjoying Spring Break with my wife and kids with him and my mom. I shared with him an article I recently published (see article here | Efficiency in Group Practice). After reading the story, he shared that he now wonders what could have been if he partnered with some like-minded specialist and sold to a group. How would his life be different? Indeed, the sale price would have been different. He sold the business to his associate for a fraction of what the business would be worth to a DSO (he is still very happy with that decision). But today, there are more DSOs that understand the specialty space and will happily pay up to partner with the best and brightest in each market.
If you would like to learn more about DSOs looking to partner with Specialists, we are happy to talk with you about what a partnership could look like for you. If you are a Specialist with a large practice or group and are curious what your business is worth, send us an e-mail or book a call here. We only work with large solo practice and groups where we are certain that we can exceed their valuation expectations.
About TUSK Partners: TUSK Partners provides industry-leading resources to group dental practices and DSOs. We help you START, GROW and SELL your DSO. For an overview of our services, please click HERE or visit our website and blog
