Reasons to Sell to a Dental Service Organization (DSO)

Why Sell to a Dental Acquisition Group or Dental Service Organization?

Why might you sell your practice to a dental acquisition group such or Dental Service Organization? Depending on your situation, one of the following reasons may describe your situation:

• I’ve built my practice, and now there are other things I would like to do in my life.
• My practice has considerably more value if sold to a Dental Organization than to another dentist.
• I have the opportunity to enhance my personal net worth by selling to a Dental Service Organization.
• The size of my practice is simply too large to sell to another individual dentist.
• By selling to a Dental Acquisition Group, I can extend a long-term lease on my owned building to a strong corporate entity. This is a huge win-win!
• I seek that right partner to allow me to pursue my vision as it concerns taking my practice to the next level and beyond. I seek a partner with capital, operational systems and strategic alliances that will provide the assistance that a Dental Organization could provide.
• I am tired of managing my growing practice. Compliance, HR, management meetings, etc. have taken me away from what I love—which is clinical care and interacting with patients.
• I no longer wish to borrow more money to invest in the needed technology my practice requires in order to maintain its competitive edge. A Dental Acquisition Group could provide that.
• The timing is right for me to pursue my exit strategy.

Selling to a DSO vs. Selling to another Dentist

Whom you sell your practice to has implications. It isn’t merely about the price you realize.

The sale of a practice to another dentist typically occurs with the buyer securing a loan that allows them to pay the seller the agreed-upon price.

When selling to a DSO, however, the purchase consideration is a combination of cash, promissory notes and, in some instances, stock (although possibly with restrictions). Many sales also include earn-outs.

Further, it is typical that sellers are employed back under an employment agreement with a DSO. In some instances, ambitious sellers have been elevated to regional managers with the right corporate partner.

When selling to another dentist, however, the seller can depart after an appropriate transition period.

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