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Navigating the dental marketplace for better DSO affiliations

DSO affiliation now comes in different shapes and sizes and joint venture deal structures allow owner-dentists to retain equity at the practice level. (Image: Taras Grebinets/Shutterstock)
Dental Tribune International

Dental Tribune International

Fri. 6 October 2023


AUSTIN, Texas, US: Affiliation with a dental support organisation (DSO) is not what it used to be. Ownerdentists now have a variety of options when it comes to practice transitions, and it is crucial that they fully understand the different ownership models and the respective advantages and disadvantages. In an upcoming free webinar, Brannon Moncrief of McLerran&Associates will provide insights on typical deal frameworks and strategies to optimise results from a DSO partnership. 

The webinar will be streamed live at 7:30 p.m. CDT on Wednesday, 11 October, and will delve into the current state of the DSO marketplace and buyer demand dynamics. The topics of discussion will include the effects of rising interest rates and capital market constraints on valuations and deal terms, helping attendees to understand whether the time is right for them to transition. 

Brannon Moncrief is chief executive officer at dental practice transaction specialist McLerran & Associates. (Image: Brannon Moncrief)

Moncrief told Dental Tribune International that demand for dental clinics from DSOs and private equity buyers remains high, despite elevated interest rates and constrained capital markets. “Now is a great time for dental practice owners to consider pursuing a sale,” he said. 

According to Moncrief, there has been an increase in the number of options that are available to dentists. “There is a wide array of deal structures currently available in today’s marketplace,” he emphasised. Commenting on which options were proving to be popular, he said: “We are seeing many of our younger clients gravitate towards joint venture deals structures, which allow them to liquidate 60% to 70% of the practice at a favourable valuation and retain 30% to 40% equity at the practice level.” 

The webinar, titled “Top 5 ways to maximise your outcome in a DSO affiliation”, will offer a holistic perspective by featuring case studies and addressing common misconceptions surrounding DSO affiliation, such as the belief that it leads to the eroding of clinical and operational autonomy. Moncrief said: “In reality, good DSOs leave dentists’ clinical autonomy fully intact and provide them with a great deal of operational autonomy. DSOs are not patient-facing and are designed to support the practice from an administrative perspective. Their responsibilities include leveraging economies of scale with payers and vendors and providing operational support in the areas of accounting, practice management, legal compliance, human resources and marketing.” 

Moncrief said that attending the webinar is a must for any successful practice owner who is considering pursuing a DSO affiliation or private equity partnership within the next five years. “We will cover a variety of topics, including current market conditions and how dental industry consolidation will have an impact on the future of dentistry. We will also address the types of practices that DSOs are looking to buy, discuss the calculation of earnings before interest, taxes, depreciation and amortisation, consider practice valuations from a DSO perspective and examine DSO deal structures.” 

Visit the DT Study Club website for more information on the webinar.

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