{"id":16011,"date":"2025-10-21T17:23:10","date_gmt":"2025-10-22T00:23:10","guid":{"rendered":"https:\/\/www.planetdds.com\/?p=16011"},"modified":"2025-10-31T07:12:49","modified_gmt":"2025-10-31T14:12:49","slug":"all-things-dso-momentum-2026","status":"publish","type":"post","link":"https:\/\/www.planetdds.com\/blog\/all-things-dso-momentum-2026\/","title":{"rendered":"All Things DSO: M&A Momentum and What to Expect for 2026\u00a0"},"content":{"rendered":"\n

In the latest All Things DSO conversation, Planet DDS Editor-in-Chief Beth Gaddis sat down with Brian Colao, Director of Dykema DSO Industry Group<\/a>, to unpack the state of dental M&A<\/a>, interest rate tailwinds, consolidation trends, and the evolving priorities of investors. While 2025 hasn\u2019t brought fireworks, Colao sees foundations being laid for a meaningful recovery heading into 2026.  <\/p>\n\n\n\n

\u201cA lot is happening behind the scenes,\u201d Colao noted. \u201cBy year\u2019s end, I expect some exciting announcements that will build real momentum.\u201d <\/p>\n\n\n\n

From seasoned EBITDA to insurance reform, here are the key trends<\/a> shaping the dental industry. <\/p>\n\n\n\n

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Watch the Webinar<\/a><\/div>\n<\/div>\n\n\n\n

Interest Rate Relief: A Turning Point for M&A? <\/h2>\n\n\n\n

Just one day before the webinar, Federal Reserve Chair Jerome Powell<\/a> hinted at additional rate cuts before year-end. Colao didn\u2019t mince words: \u201cI\u2019d be shocked if we don\u2019t see two more cuts.\u201d Taken together with previous reductions, he believes we\u2019re nearing a more favorable financing environment, which is much-needed fuel for stalled deals. <\/p>\n\n\n\n

While 2025 may still feel tepid, Colao predicts 2026 will benefit from a more liquid M&A market: \u201cSlow and steady wins the race. I\u2019m very optimistic about next year.\u201d <\/p>\n\n\n\n

Consolidation Picks Up <\/h2>\n\n\n\n

Heartland Dental<\/a>\u2019s acquisition of Smile Design Dentistry<\/a>, a dental group based in Florida with about 60 locations, captured industry attention. Colao emphasized this wasn\u2019t an isolated move, but the re-start of a trend temporarily paused by market conditions. <\/p>\n\n\n\n

\u201cWe\u2019ve always known the big DSOs wouldn\u2019t just acquire groups with just one or two practices,\u201d Colao said. \u201cThey\u2019re also targeting mid-market platforms with 25, 40, and 70 locations. Heartland is disciplined. If it makes sense, they\u2019ll move.\u201d <\/p>\n\n\n\n

“Expect more large-scale consolidations as well-capitalized groups seek strategic opportunities,” said Colao said. <\/p>\n\n\n\n

Centralization and Cutbacks: The Post-Merger Reality <\/h2>\n\n\n\n

One audience question cut to the operational heart of consolidation: “What happens to centralized services and executive roles during mergers?” <\/p>\n\n\n\n

Colao\u2019s answer was blunt but realistic. When a larger DSO acquires a smaller one, \u201cYou cut as much overhead as possible,\u201d revealed Colao. He shared an example of a 30-location group with $5 million in corporate overhead, nearly all of which was eliminated post-acquisition. While the practice-level teams typically remain intact, the back-office infrastructure is often absorbed, instantly supercharging EBITDA. <\/p>\n\n\n\n

Deal Drag: Why Some DSOs Aren\u2019t Closing<\/h2>\n\n\n\n

Not all deals are moving forward. Key reasons include:<\/p>\n\n\n\n