Key Takeaways
Selling to a DSO in Georgia follows a specific legal and financial playbook. This guide introduces the main concepts Atlanta dentists ask about most often.
- Georgia’s corporate practice of dentistry rules require a PC/MSA structure where the dentist keeps ownership of the clinical entity.
- DSO buyers focus on normalized EBITDA, and valuation can vary widely based on owner dependence, payer mix, hygiene revenue, and practice size.
- Most DSO deals blend cash at close with rollover equity and potential earnouts, so the headline price rarely equals the money you actually keep.
- The MSA and working agreement can be some of the main factors shaping your post-sale schedule, compensation, and clinical autonomy.
- Running a structured, multi-buyer process can materially improve both valuation and deal terms compared with negotiating directly with a single DSO.
Talk with McLerran & Associates about your potential DSO sale.
Prerequisites and Context: Why Georgia Is Different
This guide is written for Atlanta-area general dentists and specialists in oral and maxillofacial surgery, orthodontics, pediatric dentistry, and prosthodontics. It focuses on single-location and multi-location practices with roughly $1.5 million or more in annual revenue that are considering a DSO affiliation within the next 6 to 18 months.
A few core terms appear throughout this guide. These definitions give a shared starting point.
- EBITDA
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is the profitability metric DSOs use to value a practice. It usually differs from what the owner actually takes home.
- Add-backs
- Add-backs are personal, discretionary, or one-time expenses that get added back to reported income to show true profitability. Common examples include above-market owner compensation, personal vehicle expenses, and one-time legal fees.
- LOI
- An LOI (Letter of Intent) is a non-binding document from the buyer that outlines the headline price and deal structure before formal due diligence.
- MSA
- An MSA (Management Services Agreement) is the contract between the DSO and the dentist-owned professional entity. It defines which functions the DSO handles and which responsibilities the dentist retains.
- PC
- A PC (Professional Corporation) is the dentist-owned clinical entity that must hold the dental license and employ clinical staff under Georgia law.
- Rollover equity
- Rollover equity is the portion of sale proceeds the dentist keeps as ownership in the DSO instead of taking as cash. Many dentists view this as a potential “second bite of the apple.”
- Earnout
- An earnout is a contingent payment tied to hitting agreed performance targets after closing.
- Quality of earnings (QoE)
- Quality of earnings is the buyer’s formal review of the seller’s EBITDA claims during due diligence.
- Re-credentialing
- Re-credentialing is the process of updating Medicaid, PPO, and DEA credentials under the new ownership structure.
Under O.C.G.A. § 43-11-47, Georgia’s corporate practice of dentistry doctrine means a non-dentist DSO cannot own the clinical practice outright. It is a ground for license discipline for a Georgia dentist to practice as an employee of a non-dentist individual, or as an officer or employee of a corporation other than a Georgia professional association or professional corporation, or as a member or manager of an LLC or LLP not wholly owned by licensed dentists. The 2026 legislative session ended in April 2026 without any change to this statute, so it remains the governing law.
In practice, every Georgia DSO deal uses a management and clinical split. The DSO or its private equity backer acquires the non-clinical assets such as equipment, leases, billing infrastructure, and goodwill. It then provides non-clinical services like billing, marketing, HR, procurement, and real estate to the dentist-owned PC under an MSA. The dentist keeps the PC, which holds the license and employs the clinical team. Clinical autonomy, liability, and professional judgment stay with the licensed dentist. The MSA defines the ongoing relationship, including the management fee, typically 15% to 30% of collections, and it often shapes the seller’s day-to-day life after closing.
Georgia’s patient-notice and records-custody rules also affect every sale. The Georgia Board of Dentistry requires that notice of a practice sale be sent to all current patients at least 14 days in advance at their last known addresses, and that notice must include the effective date of the sale, a location for emergency dental care for at least 30 days, any further treatment required, and a means for patients to obtain their records. Only a dentist actively licensed in Georgia may control or maintain custody of patient dental records, which is a key reason clinical records sit with the dentist-owned PC rather than the management company in a DSO deal.
Georgia’s Medicaid landscape changed in 2026. Georgia DCH awarded new Georgia Families CMO contracts effective July 1, 2026: CareSource was retained, while Molina Healthcare, UnitedHealthcare, and Humana came in as new plans, replacing Amerigroup and Peach State Health Plan. Any practice with Medicaid exposure needs to confirm the current dental administrator for each plan and treat re-enrollment as a closing dependency.
Casual-sale sales tax rules can also affect structure. A one-time sale of a Georgia dental practice’s equipment and assets generally qualifies as a “casual sale” and does not trigger Georgia sales tax, but this exemption can be lost if the sale runs through an agent or broker regularly engaged in making sales. How the equipment sale is documented and who executes it can determine whether the exemption holds, so dentists should review this point with qualified legal and tax counsel before going to market.
Ask McLerran & Associates how Georgia law affects your sale.
How To Sell a Dental Practice to a DSO in Atlanta: The Four-Phase Process
McLerran & Associates follows a four-phase process for Atlanta owners. Each phase has its own timeline and leverage points.
- Phase 1 — Financial Audit and EBITDA Normalization. McLerran remotely accesses the practice management software, pulls production and collections reports, and compares the data with tax returns and P&L statements covering 3 to 5 years. The team unpacks every discretionary, personal, and non-recurring expense to arrive at defensible profitability. Common add-backs include above-market owner compensation normalized to a market-rate associate, typically $250,000 to $350,000 depending on specialty and geography, family members on payroll at above-market rates, personal vehicle and travel expenses, and one-time legal or consulting fees. A weak or “free” valuation that cannot be documented often gets discounted in the buyer’s quality-of-earnings review. McLerran’s CPA-led analysis aims to produce a diligence-grade EBITDA figure that holds up when buyers scrutinize it.
- Phase 2 — Competitive Bid Solicitation. McLerran builds a marketing deck and a virtual data room, then presents the practice to a vetted pool of qualified DSO and private equity buyers at the same time. Because each buyer knows others are reviewing the opportunity, the process typically produces multiple offers that can be compared side by side. This simultaneous outreach creates competitive tension that can improve both price and terms. Owners who speak with only one DSO usually see a single offer with no reference point. McLerran screens out DSOs known for poor post-close environments so those buyers never reach the table.
- Phase 3 — LOI and MSA Negotiation. McLerran negotiates the LOI on the owner’s behalf, including valuation, cash at close, equity structure, earnout terms, and key MSA provisions. The MSA is not boilerplate. It defines the management fee, the scope of DSO authority, and the seller’s ongoing clinical autonomy. McLerran also focuses on earnout mechanics, such as pro-rata payouts for near-misses and delayed start dates that account for integration disruption in the early months after closing.
- Phase 4 — Due Diligence and Closing. After LOI signing, McLerran manages the process through closing. The team helps defend EBITDA during the buyer’s quality-of-earnings review and coordinates re-credentialing with Medicaid CMOs, PPO carriers, and the DEA, which do not transfer automatically in a change of ownership. When buyers attempt to re-trade the agreed value, McLerran reminds them that other vetted bidders remain available. This structured approach contributes to the firm’s reported transaction rate of roughly 85% to 90%, compared with industry estimates closer to 35% to 40%.
Discuss McLerran’s four-phase process for your practice.
What Is Your Atlanta Dental Practice Worth in 2026?
Valuation is often where owners either gain or lose the most. A structured process around EBITDA and buyer competition can be some of the main factors that shape the final number.
DSO buyers price acquisitions on adjusted EBITDA. The multiple applied to that EBITDA depends on several factors, and identical collections can support very different values depending on the earnings base a buyer accepts. General ranges reported across 2025 and 2026 market data cluster as follows: smaller owner-dependent practices acquired as tuck-ins can see multiples in the lower single digits to around 6x; well-run single locations tend to fall in a 5x to 7x range; associate-led groups with $1 million to $3 million in EBITDA tend to clear 7x to 9x; emerging multi-location platforms tend to reach 9x to 11x; and platform-grade groups above $5 million in EBITDA can reach 10x to 12x or higher, per Private Practice Research’s May 2026 valuation report. These are ranges rather than promises. The specific multiple an Atlanta practice commands depends on its own numbers and the process around the sale.
The factors that can move a practice within or across these ranges include:
- Owner dependence. When a selling owner generates 65% to 75% of collections personally, DSO buyers often model a post-close production reduction and lower EBITDA by 20% to 30% before applying a multiple. On a $2.4 million practice at a 6x multiple, that adjustment can erase more than $1 million of headline value.
- Hygiene revenue. A hygiene department producing roughly 25% to 33% of total collections signals recurring, transferable revenue that buyers value highly.
- Payer mix. Heavy Medicaid or HMO concentration above 40% of collections can compress multiples by 0.5x to 1.0x, while a commercial PPO-dominant mix tends to support stronger pricing.
- Practice size and doctor count. A single practice often carries departure and concentration risk, while a multi-site group with a functioning management layer looks more like an operating company with redundancy. Buyers reflect that difference in the multiple.
- Technology and equipment. Deferred technology investment, such as no CBCT, aging chairs, or paper-based operations, can reduce enterprise value by 0.25x to 0.5x because buyers factor in upgrade costs.
Specialty also shapes demand. Oral and maxillofacial surgery currently commands some of the highest multiples and remains one of the fastest-consolidating segments. Orthodontics and pediatric dentistry draw strong DSO interest. General dentistry still earns aggressive, near-all-time-high valuations, while lighter-demand specialties tend to sit at the lower end of published ranges. McLerran does not publish fixed multiples by specialty, because each practice’s multiple depends on its specific numbers and the competitive process around the sale.
The headline price rarely equals the economic result. DSO buyers typically pay roughly 60% to 80% of the purchase price at closing, with the remainder paid through earnouts or equity rollover. As much as 40% of a DSO deal can be paid in equity rather than cash. Cash at close, rollover equity, and earnouts behave differently over time, so modeling real after-tax proceeds across structures and time horizons becomes central to comparing offers. Dentists should consult their own tax advisors on the treatment of each component. Much of a DSO deal is often taxed at long-term capital gains rates, while equipment recapture and non-compete payments are usually taxed as ordinary income.
For a deeper look at deal structures and their economic outcomes in the Atlanta market, see Atlanta DSO Acquisitions: 2026 Deal Structures & Outcomes.
Get a defensible valuation before you talk to a DSO.
Deal Structure Economics: Cash at Close vs. Rollover Equity vs. Earnout
Most DSO transactions combine several components rather than a single all-cash payment. Understanding how each piece behaves over time helps dentists compare offers on more than just the headline number.
Cash at close is the guaranteed money received at closing. Most DSO deals combine cash at closing, retained rollover equity, an ongoing employment agreement, and sometimes an earnout. Cash at close typically falls in the 60% to 80% of headline enterprise value band for DSO transactions. Many owners view this as the lowest-risk component of the deal.
Rollover equity is the portion of sale proceeds the dentist keeps as ownership in the DSO instead of taking as cash. Two common structures appear. Joint-venture level equity at the practice or regional level usually comes with distributions and a higher floor but a lower ceiling. Holding-company equity in the DSO’s parent entity often carries no distributions but can have a higher ceiling if the platform recapitalizes or sells at a strong multiple. DSO equity rollover typically monetizes only at a second exit in 5 to 7 years, and historical performance has been mixed. Some platforms have delivered strong returns, while others have underperformed or held longer than expected. Many advisors suggest treating rollover equity like an investment rather than guaranteed cash.
Earnouts are contingent payments tied to hitting future performance targets, typically over 12 to 36 months post-close. Earnout mechanics should be negotiated as carefully as the headline price, because if the DSO controls post-close expenses, headcount, and pricing, the buyer also influences whether the earnout target is achievable. McLerran often pushes for pro-rata provisions so a near-miss still pays most of the earnout, later start dates to account for integration disruption, and capped overhead allocations that limit the buyer’s ability to move the goalposts.
On tax treatment, much of a DSO deal often flows through goodwill. One study found that 76% or more of the purchase price in dental practice acquisitions typically flows to goodwill for tax-allocation purposes, taxed at long-term capital gains rates (20% plus 3.8% NIIT) rather than ordinary income rates that apply to equipment recapture and non-compete payments. Dentists should consult their own tax advisors before signing any LOI, because the IRC 1060 allocation, earnout terms, non-compete scope, and equity rollover structure can all affect after-tax proceeds.
McLerran produces multi-year, multi-structure financial forecasts that model after-tax proceeds across 3-, 5-, 7-, and 10-year horizons. This helps owners compare options side by side rather than anchoring on a single number.
Compare cash, equity, and earnout scenarios for your practice.
Post-Sale Autonomy and the Working Agreement
Most DSO deals keep the selling dentist in the practice for several years after closing. DSO sellers are typically required to remain as practicing dentists for 3 to 5 years post-sale, working as employees rather than owners. A minimum 5-year working agreement is common, although a shorter term may be possible if the owner has already reduced chair time and has strong associates in place.
The MSA and working agreement together define what the dentist’s post-close life looks like. Under a compliant Georgia DSO structure, the management company may control business and administrative functions, while the licensed owner retains final authority over hiring and compensation of clinical staff. Treatment planning decisions and clinical protocols remain the responsibility of the treating dentist. The DSO typically controls scheduling, billing, marketing, HR, procurement, and vendor relationships.
Post-sale compensation for the selling dentist is usually structured as a percentage of collections. Dentists transitioning from practice owner to employed clinician typically earn 30% to 35% on collections, compared to 40% to 55% as a practice owner. The compensation formula, schedule requirements, termination provisions, and non-compete geography and duration can be some of the main factors that determine whether the deal feels sustainable.
Many advisors suggest asking a simple question before signing: would you still accept this transaction if you had to work under these employment terms for several years? That answer often guides which buyer is the right fit.
Review your potential post-sale role with an advisor.
How To Run a Competitive Process (and Why It Beats Accepting the First Offer)
Approaching several qualified buyers at the same time can be one of the strongest levers an Atlanta owner has. The low end of EBITDA multiple ranges often reflects unrepresented owners who negotiate tuck-in acquisitions directly with a single buyer.
One multiplier point on a practice with $700,000 in normalized EBITDA is worth $700,000. That gap often reflects process and leverage as much as clinical performance. Unrepresented sellers negotiating directly with DSOs and PE-backed buyers can routinely leave 20% to 40% of deal value on the table, much of it due to limited preparation and lack of comparable offers.
McLerran & Associates works only on the sell side and does not represent buyers. The firm runs a structured, auction-like process among a vetted national buyer pool to create competition around each practice. The Atlanta office is led by Matt Sutton, who serves as the local point of contact for Atlanta-area owners.
The firm reports roughly 2,000 successful practice sales, about $2 billion in closed transaction volume, more than 10,000 practices evaluated, and a transaction rate of roughly 85% to 90%. Many clients see materially higher valuations than they receive in early one-off conversations with DSOs, although individual results vary by practice.
See what a structured multi-buyer process could mean for your practice.
Frequently Asked Questions
How Long Does It Take to Sell a Dental Practice to a DSO in Atlanta?
End-to-end, a DSO sale in Atlanta typically runs 6 to 18 months from the start of preparation to closing. The competitive bid phase usually fits within that window as a defined marketing period. LOI negotiation, due diligence, and closing often add 120 to 180 days from signed LOI to close. Georgia-specific items such as Medicaid re-enrollment with the new CMO roster effective July 2026, PPO re-credentialing that can take 30 to 90 days per carrier, and DEA registration for the new structure usually run in parallel with the deal and should be treated as closing dependencies. Owners who begin preparation 18 to 24 months before going to market consistently achieve stronger outcomes than those who decide to sell and list within months.
What Is the Dentist Two-Year Rule and Does It Affect a Georgia Sale?
The “two-year rule” is an informal phrase for the post-sale employment commitment DSOs often expect. In practice, most DSO deals require the selling dentist to remain as an employed clinician for 3 to 5 years. A shorter work-back may be negotiable if the owner has already reduced chair time and has a strong associate bench. Georgia does not have a statutory two-year rule for dental practice sales. The working agreement duration is a negotiated business term.
Do I Have to Keep Working After I Sell?
On a DSO transaction, a multi-year working agreement is standard. The duration, schedule, compensation structure, and clinical autonomy terms are negotiable, and many advisors recommend negotiating them at the same time as purchase price. On a doctor-to-doctor walk-away sale, the seller often works back only 4 to 8 weeks before exiting. If minimizing post-sale clinical commitment is a priority, the right path, whether DSO or private buyer, depends on the practice’s size, profitability, and the owner’s goals.
Are DSO Deals All Cash?
Most DSO deals combine cash at close, rollover equity in the DSO platform, and sometimes an earnout tied to post-close performance. Cash at close typically represents 60% to 80% of total deal value. As much as 40% of a deal can be paid in equity rather than cash. The equity component can sit at the joint-venture level with distributions or at the holding-company level with more upside potential at the next sale. Each component carries different risk, liquidity, and tax treatment, so modeling full after-tax proceeds across structures often matters more than focusing on the headline number alone.
How Do I Know Which DSOs Are the Good Ones?
Identifying strong DSO partners starts with buyer vetting. Roughly 130 private equity-backed DSOs are estimated to operate in the US market, with some industry estimates placing the figure closer to 200. McLerran reviews which buyers have solid financial backing, experienced leadership, and a track record of stable post-close environments. The firm has also blacklisted buyers known for poor outcomes, including weaker platforms that emerged when capital flooded the space after COVID. Reviewing audited financials, understanding whether the private equity sponsor has executed similar strategies successfully, and confirming that same-store revenue is still growing can all help underwrite a DSO like an investment.
Get help evaluating potential DSO partners.
Conclusion: Control the Process, Maximize Your Outcome
Selling a dental practice to a DSO in Atlanta involves Georgia-specific mechanics, including the corporate practice of dentistry doctrine under O.C.G.A. § 43-11-47, the PC/MSA structure, the active 2026 buyer pool, and re-credentialing requirements that run alongside every transaction. Understanding these elements creates a foundation for better decisions, but the process used to approach buyers often has the greatest impact on the final outcome.
McLerran & Associates focuses exclusively on sell-side advisory for dental practices and does not represent buyers. The firm creates competition among vetted DSOs, helps control the narrative around EBITDA, and works to align deal structure and post-close life with the owner’s goals. With roughly 2,000 successful practice sales, about $2 billion in closed transaction volume, and a reported transaction rate of roughly 85% to 90%, McLerran positions itself as a specialized listing agent for established dental practices.
The Atlanta office is led by Matt Sutton. Many owners start with a confidential discovery call to discuss their practice, goals, and options before deciding whether to pursue a DSO sale.
Schedule a free, confidential discovery call with McLerran & Associates.
