DSO Offer Evaluation and Seller-Side Consulting
When a DSO makes an offer, they bring analysts, attorneys, and an operations team. Most selling dentists bring no one. We even the table.
The DSO Has a Team. You Should Too.
Group practices and DSOs now approach dentists directly, often with a number attached before any meaningful conversation has happened. That number is usually the only part of the offer a seller fully understands.
The organization making the offer has done this many times. They have financial analysts who model your practice, attorneys who draft the agreement, and an operations team that already knows exactly what they will change after closing. Everyone in that room is working for them.
The selling dentist is typically doing this once in a lifetime. That asymmetry, not the headline multiple, is where sellers lose the most value.
We work only for you. We do not broker transactions, we do not take a percentage of the sale, and we have no relationship with any DSO. Our role is to tell you what the offer actually says, what it will feel like to work under it, and where it can be improved.
What a DSO Offer Actually Contains
The purchase price is one line in a document that will govern your working life for the next several years. These are the parts that decide what you actually receive.
Adjusted EBITDA, Not Collections
DSO offers are built on a multiple of adjusted earnings, not a percentage of collections. The adjustment usually replaces your owner compensation with a market associate rate, which lowers the earnings figure the multiple is applied to. Two offers with the same multiple can produce very different prices depending on how the adjustments are calculated.
Cash at Closing vs. Rollover Equity
A portion of the price is often paid in equity of the parent organization rather than cash. That equity is worth what someone eventually pays for it, on a timeline you do not control. Understanding what share of your price is actually cash at closing is one of the most important numbers in the deal.
Earnouts and Holdbacks
Part of the consideration may depend on the practice hitting production or collections targets after you no longer control how the practice is run. We look at whether those targets are realistic given the operational changes the buyer intends to make.
The Post-Sale Employment Agreement
Most DSO transactions require the selling dentist to stay on for a period of years under a compensation formula that differs from ownership income. Production expectations, schedule control, and clinical autonomy are all defined here. For many sellers this document matters more day to day than the purchase price.
Non-Compete Scope and Duration
The radius, the length, and the definition of competing activity determine what you are permitted to do afterward. This deserves careful review with your attorney, and we make sure you understand the practical implications before you get there.
What Changes on Day One
Supply and lab contracts, scheduling templates, hygiene protocols, staffing decisions, and insurance participation are commonly standardized after closing. We tell you which of your current systems are likely to survive the transition and which are not.
The Three Questions We Answer
Is the Offer Fair for This Practice?
We rebuild the earnings picture from your own practice management data rather than accepting the buyer's adjusted figure. Production by provider, hygiene contribution, payer mix, and write-offs all affect what the practice is genuinely worth. If the adjustments understate your earnings, that is a negotiable item.
What Will It Be Like to Work Here Afterward?
We translate the employment agreement and the buyer's operating model into practical terms: your likely schedule, your compensation under their formula, the clinical decisions that will no longer be yours, and the effect on the team you built.
Is Selling Now the Right Move at All?
Sometimes the honest answer is that the practice is worth more in two years with the hygiene department running properly and the payer mix corrected. We will tell you when improving the practice first would produce a materially better outcome than accepting the offer in front of you.
Warning Signs in a DSO Offer
- Pressure to sign a letter of intent quickly, before you have had the offer reviewed independently
- An exclusivity period that prevents you from speaking with other buyers while the terms are still moving
- EBITDA adjustments that are described but not itemized, so you cannot verify how the price was derived
- A large share of the price in rollover equity with no clear explanation of how or when it becomes cash
- Earnout targets set above the practice's historical performance
- An employment agreement that arrives late in the process, after you are emotionally committed to the sale
- Production expectations that assume a schedule you have never actually worked
None of these automatically means the offer is bad. Each one means you should understand it fully before signing.
Frequently Asked Questions About DSO Offers
No. For many dentists a DSO sale is the right outcome, particularly when the alternative is continuing to manage a business they no longer want to run. Our role is to make sure the decision is informed and the terms are understood, not to push you toward any particular answer.
No, and you should have both. Your attorney handles the legal terms and your CPA handles the tax structure. We cover the operational and clinical reality that neither of them evaluates: whether the earnings figure reflects how the practice actually performs, and what daily practice life looks like under the buyer's model.
Ideally before you sign a letter of intent, because that is when the most leverage exists. We can still help after an LOI is signed, but many terms become harder to move once exclusivity has started.
Yes. Comparing offers is one of the most useful things we do, because headline multiples are rarely comparable. We normalize them so you can see the actual cash at closing, the real earnings base, and the practical differences in the employment terms.
Yes. The operational work that makes a practice attractive to a buyer is the same work that makes it more profitable to own. If a sale is three to five years away, that is the ideal time to address the issues that currently reduce what the practice is worth. See our practice growth consulting.
Have an Offer in Front of You?
Bring us the offer before you sign anything. We will tell you what it actually says, what it is worth, and what your working life looks like on the other side of it.