{"id":12157,"date":"2024-05-05T06:05:48","date_gmt":"2024-05-05T13:05:48","guid":{"rendered":"https:\/\/www.planetdds.com\/?p=11058"},"modified":"2024-12-30T08:28:31","modified_gmt":"2024-12-30T16:28:31","slug":"dso-ma-planning-and-timelines-for-a-dental-practice-sale","status":"publish","type":"post","link":"https:\/\/www.planetdds.com\/blog\/dso-ma-planning-and-timelines-for-a-dental-practice-sale\/","title":{"rendered":"DSO M&A: Planning and Timelines for a Dental Practice Sale"},"content":{"rendered":"

This is the second in a three-part series <\/span>about DSO mergers and acquisitions (M&A). <\/span><\/span>The article was written by Planet DDS staff and originally published on DrBicuspid.com<\/a>.<\/span><\/em><\/p>\n

Consolidation is the buzzword in the dental industry, and it\u2019s not just dentists who are planning for retirement. The fastest-growing segment right now is small group practices \u2013 three to five locations \u2013 that are being acquired by larger dental support organizations (DSOs). There\u2019s also movement with large groups; several DSOs with more than 70 practices are exploring mergers with even larger groups.<\/span>\u00a0<\/span><\/p>\n

\u201cGroups that had variable rates on their debt have been squeezed recently leaving them in a bad position with their banks,\u201d said Chris McClure, co-founder of Aligned Dental Partners, which provides M&A advisory and consulting services to group practices and DSOs. \u201cMany have failed their bank covenants and don\u2019t have leverage to fund new acquisitions.\u201d<\/span>\u00a0<\/span><\/p>\n

Private practice owners and DSO executives are evaluating the market to determine the best time to sell. Many strategic buyers postponed transactions in early 2024 due to high interest rates and the rising cost of capital. <\/span>\u00a0<\/span><\/p>\n

\u201cSame-store EBITDA growth is really important right now,\u201d said Kevin Cumbus, founder of TUSK Practice Sales. \u201cBuyers want to know: Is your business getting more or less profitable in today\u2019s market?\u201d<\/span>\u00a0<\/span><\/p>\n

What Dentists and DSO Executives Should Do to Prepare for a Sale<\/span><\/b>\u00a0<\/span><\/p>\n

Planning for a dental practice or group sale starts months, even years, before going to market.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cI recommend practices get evaluated at least annually so you can identify areas to improve and position yourself for the greatest success,\u201d said Rondi Michaux, the former Director of Corporate Development for two large DSOs.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cAnything that makes you more efficient, lets you do more with less, and increases your A\/R will help make you more attractive to a buyer,\u201d said Michaux.<\/span>\u00a0<\/span><\/p>\n

As you\u2019re evaluating your practice from a buyer\u2019s point of view, consider:<\/span>\u00a0<\/span><\/p>\n