{"id":124,"date":"2026-07-17T05:20:35","date_gmt":"2026-07-17T05:20:35","guid":{"rendered":"https:\/\/dentaltransitions.sites.aigrowthagent.co\/dental-practice-valuation-dso-sale\/"},"modified":"2026-07-17T05:20:35","modified_gmt":"2026-07-17T05:20:35","slug":"dental-practice-valuation-dso-sale","status":"publish","type":"post","link":"https:\/\/dentaltransitions.com\/articles\/dental-practice-valuation-dso-sale\/","title":{"rendered":"Dental Practice Valuation for a DSO Sale: 2026 Guide"},"content":{"rendered":"<h2>Key Takeaways for 2026 DSO Sales<\/h2>\n<ul>\n<li>\n<p>Normalized EBITDA is often the key number in a DSO sale. It reflects recurring profitability after removing owner-specific and one-time costs.<\/p>\n<\/li>\n<li>\n<p>DSOs ask for extensive financial and operational documentation before issuing a letter of intent (LOI). Owners who prepare this information early usually negotiate from a stronger position.<\/p>\n<\/li>\n<li>\n<p>2026 DSO multiples can vary by practice size, specialty, payer mix, hygiene performance, and systems. Larger, well-documented practices often see higher ranges.<\/p>\n<\/li>\n<li>\n<p>Deal structure, including cash at close, rollover equity, and earnout terms, can determine your actual take-home proceeds. McLerran &amp; Associates models several structures to estimate after-tax outcomes.<\/p>\n<\/li>\n<li>\n<p>McLerran &amp; Associates provides a buyer-grade valuation and competitive process designed to protect value through closing. <a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\">Request a confidential discovery call to explore your options<\/a>.<\/p>\n<\/li>\n<\/ul>\n<h2>How Normalized EBITDA Works in a DSO Sale?<\/h2>\n<p>Normalized EBITDA is the starting point for most DSO valuations. The calculation begins with the practice\u2019s reported net income and then adds back non-cash charges such as depreciation and amortization, financing costs such as interest, and one-time or owner-specific expenses that will not continue under new ownership. The result is an estimate of what the practice might earn as a standalone business run by a market-rate clinical team. That is the earnings stream a buyer is usually acquiring.<\/p>\n<p>The table below outlines common add-back categories and the types of adjustments that can move normalized EBITDA above reported net income. Each add-back category typically requires clear documentation. Undocumented add-backs are one of the most common reasons valuations are reduced during diligence.<\/p>\n<table style=\"min-width: 100px;\">\n<colgroup>\n<col style=\"min-width: 25px;\">\n<col style=\"min-width: 25px;\">\n<col style=\"min-width: 25px;\">\n<col style=\"min-width: 25px;\"><\/colgroup>\n<tbody>\n<tr>\n<th colspan=\"1\" rowspan=\"1\">\n<p>Add-Back Category<\/p>\n<\/th>\n<th colspan=\"1\" rowspan=\"1\">\n<p>What It Is<\/p>\n<\/th>\n<th colspan=\"1\" rowspan=\"1\">\n<p>Why It Is Added Back<\/p>\n<\/th>\n<th colspan=\"1\" rowspan=\"1\">\n<p>Documentation Required<\/p>\n<\/th>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Depreciation &amp; Amortization<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Non-cash accounting charges on equipment and leasehold improvements<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Non-cash, so it does not affect operating cash flow<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Tax returns, depreciation schedule<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Interest Expense<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Loan interest on practice debt retired at close<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Debt is typically paid off at closing, so it is not an ongoing cost<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Loan statements, payoff letters<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Owner Compensation Normalization<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Difference between actual owner draw and market-rate associate cost, often 28\u201332% of production for a general dentist<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Replaces owner economics with the cost of a hired clinician, which reflects the ongoing labor cost<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Production reports, W-2s, payroll records<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Personal Expenses Run Through the Practice<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Personal vehicle, travel, meals, or other discretionary costs on the P&amp;L<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>These expenses usually will not continue under new ownership<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Bank statements, receipts, categorized ledger<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Non-Productive Family Payroll<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Compensation paid to family members not performing documented clinical or administrative roles<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Often represents owner distribution rather than a true operating expense<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Job descriptions, payroll records, time logs<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>One-Time Professional Fees<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Legal, accounting, or consulting costs tied to a specific non-recurring event<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>These costs generally will not recur in normal operations<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Invoices, engagement letters<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Non-Recurring Repairs or Buildout Costs<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Emergency equipment repair, one-time renovation, or cyber-incident remediation<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>These items are not part of the ongoing operating cost structure<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Invoices, insurance claims<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Related-Party Rent Adjustment<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Rent paid to an entity owned by the doctor that is above or below market rate<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Rent is normalized to market rates because above-market rent inflates expenses and suppresses EBITDA<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Lease agreement, market-rate comparables<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Not every expense that reduces reported income qualifies as a legitimate add-back. Recurring costs such as clinical staff, hygiene support, billing, supplies, compliance, marketing, and equipment maintenance generally should not be added back simply because they lower earnings. A buyer\u2019s quality-of-earnings (QoE) team, which is the accounting group that audits the seller\u2019s EBITDA bridge, will usually reverse any add-back that lacks documentation or reflects a true ongoing operating cost.<\/p>\n<p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>See your practice\u2019s normalized EBITDA built to buyer-grade standards by requesting a confidential analysis from McLerran &amp; Associates.<\/strong><\/a><\/p>\n<h2>Information DSOs Expect Before Making an Offer<\/h2>\n<p>Once you understand your normalized EBITDA, the next step is gathering the documentation DSOs use to validate that number and shape an offer. Before a DSO issues a letter of intent (LOI, a non-binding written offer that outlines price and structure), its acquisition team usually requests a substantial package of financial and operational data. Owners who assemble this information in advance tend to control the narrative. Owners who scramble during diligence can appear disorganized and may face more pressure on price.<\/p>\n<p>A typical DSO pre-offer information request can include:<\/p>\n<ul>\n<li>\n<p>3\u20135 years of profit-and-loss statements and tax returns<\/p>\n<\/li>\n<li>\n<p>Year-to-date financials for the current period<\/p>\n<\/li>\n<li>\n<p>Production and collection reports by provider, broken out monthly<\/p>\n<\/li>\n<li>\n<p>Active patient count, usually patients seen within the prior 18\u201324 months, and new patient volume trends<\/p>\n<\/li>\n<li>\n<p>Payer-mix analysis showing the percentage of collections from fee-for-service, PPO, and government sources<\/p>\n<\/li>\n<li>\n<p>Hygiene production as a percentage of total collections, with recall compliance rates<\/p>\n<\/li>\n<li>\n<p>Accounts receivable aging report, where balances over 90 days often raise diligence concerns<\/p>\n<\/li>\n<li>\n<p>Operatory count and current utilization<\/p>\n<\/li>\n<li>\n<p>Provider roster, compensation structure, and employment agreements for associates<\/p>\n<\/li>\n<li>\n<p>Lease agreement, remaining term, renewal options, and rent schedule<\/p>\n<\/li>\n<li>\n<p>Equipment list and approximate age of major items<\/p>\n<\/li>\n<li>\n<p>OSHA compliance documentation and any open regulatory matters<\/p>\n<\/li>\n<li>\n<p>Practice management software details and whether records are cloud-based<\/p>\n<\/li>\n<\/ul>\n<p>McLerran &amp; Associates offers an upfront diligence package that helps you prepare for these buyer requests so you can go to market on offense rather than defense. <a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>Connect with the team to review which documents your practice already has in place and which gaps to close.<\/strong><\/a><\/p>\n<h2>How 2026 DSO Multiples Are Shaped<\/h2>\n<p>DSO acquisition multiples in 2026 are usually applied to normalized EBITDA and can vary by practice size, specialty, and several operational factors. The ranges below reflect current market observations across multiple data sources and serve as general orientation rather than guarantees. Your specific multiple typically depends on your specific numbers.<\/p>\n<p>Single-doctor and add-on practices often sit at lower multiples of normalized EBITDA. Associate-led groups generating $1\u20133 million in EBITDA can reach higher ranges. Emerging multi-location platforms at $3\u20135 million in EBITDA can move higher still, and platform-grade groups above $5 million in EBITDA can approach the upper end of observed ranges. Market data suggests that DSO platform acquisitions usually command higher multiples, while add-on acquisitions tend to trade at lower multiples of normalized EBITDA.<\/p>\n<p>Specialty practices can see a premium over general dentistry at similar size levels. Many buyers view oral and maxillofacial surgery, orthodontics, and pediatric dentistry as especially attractive due to higher margins and more stable patient bases, although exact multiples still vary by deal and buyer.<\/p>\n<p>Several factors often work together to move a multiple upward within its range. These include:<\/p>\n<ul>\n<li>\n<p>Hygiene revenue above 30% of total collections, which can signal recurring and transferable patient demand<\/p>\n<\/li>\n<li>\n<p>Associate production that reduces owner dependency below roughly 70% of total chair time<\/p>\n<\/li>\n<li>\n<p>A fee-for-service or commercial PPO payer mix with limited Medicaid exposure<\/p>\n<\/li>\n<li>\n<p>Consistent same-store revenue growth over a trailing 24\u201336 month period<\/p>\n<\/li>\n<li>\n<p>Documented standard operating procedures, clear KPI dashboards, and a trained office manager who can operate with limited oversight<\/p>\n<\/li>\n<li>\n<p>Modern digital workflows such as intraoral scanning, CBCT, and cloud-based practice management<\/p>\n<\/li>\n<li>\n<p>A favorable lease with 5 or more years remaining and reasonable renewal options<\/p>\n<\/li>\n<li>\n<p>Geographic alignment with the acquiring DSO\u2019s existing footprint<\/p>\n<\/li>\n<\/ul>\n<p>Other factors can work together to compress a multiple. Common examples include:<\/p>\n<ul>\n<li>\n<p>Owner-doctor performing more than 90% of production, which can increase perceived risk<\/p>\n<\/li>\n<li>\n<p>Medicaid representing more than 40% of revenue, which can narrow the buyer pool<\/p>\n<\/li>\n<li>\n<p>Fewer than 5 years remaining on the primary lease<\/p>\n<\/li>\n<li>\n<p>Deferred equipment replacement or limited digital technology<\/p>\n<\/li>\n<li>\n<p>Declining collections over the trailing 3 years<\/p>\n<\/li>\n<\/ul>\n<p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>Request a side-by-side valuation from McLerran &amp; Associates to see where your practice may land in the 2026 market and which levers could move your multiple.<\/strong><\/a><\/p>\n<h2>Cash, Equity, and Earnouts: Estimating What You Keep<\/h2>\n<p>The headline multiple is only one part of your outcome. The way a DSO structures the deal, including the mix of cash at close, rollover equity, and earnout, can determine what you receive and when you receive it. Many DSO transactions close with 60\u201375% cash at close, 15\u201330% rollover equity, which is effectively required in many structures, and 5\u201315% earnout tied to retained EBITDA over 12\u201336 months.<\/p>\n<p>Rollover equity, which is the portion of your proceeds reinvested as an ownership stake in the DSO platform, is often structured in 2 main ways:<\/p>\n<ul>\n<li>\n<p><strong>Joint-venture (JV) equity:<\/strong> Ownership in your specific practice entity, usually with ongoing distributions. This structure can offer a higher floor and a lower ceiling.<\/p>\n<\/li>\n<li>\n<p><strong>Holding-company (HoldCo) equity:<\/strong> Ownership in the parent DSO across its full portfolio. This structure usually does not pay distributions during the hold period but can provide a higher potential payout at the platform\u2019s next recapitalization or sale, often 3\u20137 years out.<\/p>\n<\/li>\n<\/ul>\n<p>Earnouts are contingent payments tied to post-close performance targets, often EBITDA or production metrics, over a defined period. Earnout disputes are a frequent source of post-sale litigation in dental transactions and can stem from cliff structures, unclear overhead allocations, or buyer-added corporate expenses that reduce achievable EBITDA. McLerran &amp; Associates typically negotiates for non-punitive earnout terms, including pro-rata provisions so a near-miss on a target still pays most of the earnout and later start dates that account for integration periods.<\/p>\n<p>Multi-year cash-flow modeling across 3, 5, 7, and 10-year horizons, with conservative recapitalization assumptions, can help you compare what different structures might net after tax. Many DSO deal proceeds are taxed at long-term capital gains rates instead of ordinary income rates, which can create a 13\u201317 percentage point difference in tax rate on large dollar amounts.<\/p>\n<p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>Use McLerran &amp; Associates\u2019 multi-structure forecasting to compare estimated after-tax proceeds across deal options before you commit.<\/strong><\/a><\/p>\n<h2>Red Flags That Can Trigger Re-Trading<\/h2>\n<p>Re-trading occurs when a buyer reduces the agreed headline price after the LOI is signed and cites findings from the quality-of-earnings review. Many sellers lose value at this stage, yet careful preparation can often reduce that risk.<\/p>\n<p>Common diligence findings that can trigger re-trading include:<\/p>\n<ul>\n<li>\n<p>Add-backs that lack documentation or represent recurring operating costs<\/p>\n<\/li>\n<li>\n<p>Accounts receivable balances over 90 days that suggest collection issues<\/p>\n<\/li>\n<li>\n<p>Revenue recorded on production sheets but routinely written off due to uncapped PPO fee schedules, sometimes called phantom production<\/p>\n<\/li>\n<li>\n<p>Associate misclassification, such as 1099 independent contractor arrangements that create retroactive tax exposure<\/p>\n<\/li>\n<li>\n<p>Marketing spend below roughly 2\u20133% of revenue, which buyers may add back as a future operating expense, reducing normalized EBITDA<\/p>\n<\/li>\n<li>\n<p>Billing patterns that raise compliance questions under the False Claims Act<\/p>\n<\/li>\n<li>\n<p>Undisclosed lease problems, open OSHA citations, or unresolved payer audits<\/p>\n<\/li>\n<\/ul>\n<p>McLerran &amp; Associates prepares a buyer-grade EBITDA analysis before the practice goes to market. This work mirrors the quality-of-earnings review a buyer\u2019s accountants will perform and allows the seller\u2019s team to address issues early. When a buyer\u2019s QoE team challenges an add-back, McLerran responds with documentation. Because McLerran typically runs a competitive process with multiple vetted bidders, it can also remind buyers that other qualified offers exist if a buyer attempts to reduce value without clear cause.<\/p>\n<p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>Learn how McLerran\u2019s CPA-led valuation and preparation process can help your agreed value hold through closing.<\/strong><\/a><\/p>\n<h2>Private Buyer vs. DSO: Comparing Economics<\/h2>\n<p>For owners of practices in the $1.5\u20133 million revenue range, both a doctor-to-doctor sale and a DSO affiliation can be realistic paths. The economics can differ across valuation method, cash-at-close certainty, post-sale work-back, and legacy considerations.<\/p>\n<table style=\"min-width: 125px;\">\n<colgroup>\n<col style=\"min-width: 25px;\">\n<col style=\"min-width: 25px;\">\n<col style=\"min-width: 25px;\">\n<col style=\"min-width: 25px;\">\n<col style=\"min-width: 25px;\"><\/colgroup>\n<tbody>\n<tr>\n<th colspan=\"1\" rowspan=\"1\">\n<p>Dimension<\/p>\n<\/th>\n<th colspan=\"1\" rowspan=\"1\">\n<p>Private Buyer (Doctor-to-Doctor)<\/p>\n<\/th>\n<th colspan=\"1\" rowspan=\"1\">\n<p>DSO Add-On Acquisition<\/p>\n<\/th>\n<th colspan=\"1\" rowspan=\"1\">\n<p>DSO Platform Acquisition<\/p>\n<\/th>\n<th colspan=\"1\" rowspan=\"1\">\n<p>McLerran &amp; Associates Process<\/p>\n<\/th>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p><strong>Valuation Methodology<\/strong><\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Lower multiples of normalized EBITDA or a percentage of collections<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Lower multiples of normalized EBITDA<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Higher multiples of normalized EBITDA<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>CPA-led EBITDA analysis built to buyer standards, with side-by-side valuation for both paths<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p><strong>Cash at Close<\/strong><\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>High percentage of purchase price<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Moderate percentage of headline value<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Moderate percentage of headline value<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Negotiated to increase cash at close within market norms, with attention to fair earnout terms<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p><strong>Post-Sale Work-Back<\/strong><\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Often 4\u20138 weeks for a walk-away sale<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Multi-year employment agreement is common<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Multi-year employment agreement with geographically defined non-competes<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Negotiated around the owner\u2019s goals, with shorter work-backs pursued when feasible<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p><strong>Transaction Certainty<\/strong><\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Simpler structure and faster close, often 60\u2013120 days<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>More complex diligence, often 3\u20136 months<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Institutional diligence, often 3\u20136 months<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>High transaction completion rate compared with broader industry norms<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"1\" rowspan=\"1\">\n<p><strong>Legacy &amp; Staff Protection<\/strong><\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Buyer is a dentist, so cultural continuity can be strong<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Experience varies by DSO and usually requires vetting<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Experience varies by platform and requires deeper vetting<\/p>\n<\/td>\n<td colspan=\"1\" rowspan=\"1\">\n<p>Buyers are pre-vetted for fit, and DSOs with poor reputations are excluded<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>McLerran &amp; Associates works both paths in roughly equal measure, with an approximate 50\/50 split between private-buyer and DSO transactions. This balance can give owners a more neutral side-by-side comparison instead of a recommendation shaped by a single preferred path.<\/p>\n<p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>Request both a private-buyer and DSO valuation so you can compare your options before choosing a direction.<\/strong><\/a><\/p>\n<h2>Buyer-Vetting Checklist for DSO Offers<\/h2>\n<p>Not every DSO that submits an offer will be a strong long-term partner. As much as 40% of a DSO deal can be paid in equity, so the seller is effectively investing in the DSO platform. Evaluating that investment can be just as important as negotiating the headline price.<\/p>\n<p>Before advancing any DSO offer to final negotiations, many owners review the following areas together, since they form a broader picture of platform quality:<\/p>\n<ul>\n<li>\n<p><strong>Financial backing:<\/strong> Look for a credible private equity sponsor with a history of successful healthcare platform exits. Confirm that the platform is profitable and that same-store revenue is still growing at existing locations.<\/p>\n<\/li>\n<li>\n<p><strong>Management team:<\/strong> Assess whether leadership has experience operating dental practices at scale and whether they have guided a recapitalization before.<\/p>\n<\/li>\n<li>\n<p><strong>Post-close clinical autonomy:<\/strong> Clarify which decisions you will retain, such as treatment planning, staffing, and fee schedules, and which decisions the DSO will control.<\/p>\n<\/li>\n<li>\n<p><strong>Seller references:<\/strong> Speak with dentists who sold to this DSO 2\u20134 years ago and ask whether they remain satisfied with the partnership.<\/p>\n<\/li>\n<li>\n<p><strong>Equity structure transparency:<\/strong> Determine whether rollover equity sits at the JV or HoldCo level, what the liquidation preferences are, and when the next recapitalization is anticipated.<\/p>\n<\/li>\n<li>\n<p><strong>Earnout terms:<\/strong> Confirm that targets are based on metrics you can influence and review whether cliff provisions could eliminate the earnout for a near-miss.<\/p>\n<\/li>\n<li>\n<p><strong>Integration track record:<\/strong> Ask whether the DSO has successfully integrated practices of similar size and specialty and what the average staff retention rate is after closing.<\/p>\n<\/li>\n<li>\n<p><strong>Debt load:<\/strong> Review whether the platform carries a debt level that could limit operations or create pressure for a distressed sale.<\/p>\n<\/li>\n<\/ul>\n<p>McLerran &amp; Associates pre-vets every buyer that enters its process. DSOs known for poor post-close environments, including undercapitalized platforms that emerged when capital surged into the space after COVID, are excluded so they never reach the negotiation table.<\/p>\n<p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>Discuss which DSOs fit your goals and how McLerran screens out weak partners to help protect your legacy and equity.<\/strong><\/a><\/p>\n<h2>Frequently Asked Questions<\/h2>\n<h3>What multiple will my practice sell for in 2026?<\/h3>\n<p>There is no single multiple that fits every practice. Multiples can be shaped by your normalized EBITDA level, how much production is handled by associates versus you as the owner, your payer mix, the strength of your hygiene program, your revenue trend, and your lease terms. As a general orientation, smaller single-doctor practices often attract lower multiples as DSO add-ons, while larger multi-location groups with documented systems and associate depth can attract platform-level multiples that are meaningfully higher. Specialty can also matter, with some specialties trading at premiums over general dentistry at similar size levels. Your multiple is usually determined by your specific numbers, which a buyer-grade valuation can help quantify before you go to market.<\/p>\n<h3>Can I get mostly cash at close in a DSO deal?<\/h3>\n<p>The answer can depend on your market, your practice profile, and the buyer. A higher cash-at-close percentage, such as 70\u201375% or above, can be achievable in some situations, particularly for practices with strong fee-for-service payer mix, low owner dependency, and multiple competing buyers. It can be harder in markets where DSOs favor heavier equity alignment or for platform-level transactions where buyers expect sellers to retain meaningful ownership. McLerran &amp; Associates tracks which buyers in your market are structuring cash-heavy deals and negotiates for the strongest cash-at-close terms that the competitive landscape may support.<\/p>\n<h3>How do I know which DSOs are the good ones?<\/h3>\n<p>Vetting DSOs can be one of the most important parts of the sale process. The DSO market includes well-backed, well-run platforms with strong records and also undercapitalized or poorly managed organizations that can put retained equity at risk. Helpful indicators of a strong DSO partner can include a credible private equity backer with prior healthcare exits, a management team with proven operational experience, profitability and same-store growth at existing locations, transparent equity documentation, and positive references from dentists who sold to them 2 or more years ago. McLerran &amp; Associates has spent years building relationships across the DSO landscape and has blacklisted buyers known for poor post-close environments so that offers reaching your table come from vetted partners.<\/p>\n<h3>What happens to my staff and patients after I sell to a DSO?<\/h3>\n<p>Many practice owners place staff and patient outcomes at the center of their decision. The result often depends on which DSO you choose and how the transition is structured. McLerran &amp; Associates focuses on both price and fit, identifying buyers whose strategy, support model, and culture align with what you want for your team and your patients. The firm acts as a buffer throughout the process to help protect staff relationships and goodwill and does not advance buyers to final negotiations unless they show a credible record of staff and patient retention after closing. In this approach, finding the right fit is treated as equally important to achieving a strong headline number.<\/p>\n<h3>Is now a good time to sell my dental practice?<\/h3>\n<p>Demand for well-documented, high-quality practices remains solid, and valuations for many Class A assets sit near historically strong levels. At the same time, the market has shifted since the peak years of 2021\u20132022. Multiples have compressed somewhat as interest rates increased and DSOs became more selective about diligence quality. Practices achieving the strongest outcomes in 2026 tend to go to market with clean, defensible financials, strong operational metrics, and a competitive process that surfaces multiple offers at once. If your practice is not yet positioned for its best valuation, McLerran &amp; Associates will typically say so directly and can update your valuation at no charge a year later rather than encourage a sale before you are ready.<\/p>\n<h2>Conclusion: Using a Competitive, Buyer-Grade Process<\/h2>\n<p>Normalized EBITDA often drives what a DSO is willing to pay. Owners who define that number with a CPA-led analysis built to buyer standards usually go to market from a stronger position. Owners who allow the buyer to define it can give up control of the conversation.<\/p>\n<p>McLerran &amp; Associates\u2019 approach reflects experience across roughly 2,000 successful practice sales, approximately $2 billion in closed transaction volume, and more than 10,000 practices evaluated. Clients who run a competitive, auction-style process through McLerran often see meaningfully higher valuations than owners who sell on their own or through a single-buyer path.<\/p>\n<p>The process works by combining 3 elements that can be difficult to find in one place. These include a valuation built to withstand institutional review, a competitive bid process among a vetted pool of buyers, and side-by-side modeling of both private-buyer and DSO paths so you can choose with fuller information.<\/p>\n<p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https:\/\/dentaltransitions.com\/contact-us\/\"><strong>Schedule a confidential discovery call with McLerran &amp; Associates to discuss your practice, your goals, and potential timing.<\/strong><\/a> Call (512) 900-7989 or email info@dentaltransitions.com. The biggest financial decision of your career can benefit from an experienced sell-side advocate focused on dental practices.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn how DSOs value practices using EBITDA multiples. McLerran helps maximize your sale price and model after-tax outcomes. Request a valuation.<\/p>\n","protected":false},"author":1,"featured_media":123,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-124","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts\/124","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/comments?post=124"}],"version-history":[{"count":0,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts\/124\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/media\/123"}],"wp:attachment":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/media?parent=124"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/categories?post=124"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/tags?post=124"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}