What DSOs Look for When Acquiring a Dental Practice

DSO acquisitions are reshaping the dental industry. Here is what these buyers prioritize, how they value practices, and what independent owners need to know before they receive an offer.

The dental industry is consolidating at a pace that would have been difficult to predict a decade ago. The number of DSOs in the United States grew from approximately 100 in 2010 to over 2,000 by 2023. As of 2025, there are approximately 130 private equity backed DSOs actively acquiring practices, more than in any other healthcare vertical. DSO affiliation among US dentists reached 16.1% in 2024, up significantly from 7.2% in 2015.

For independent practice owners, this consolidation creates both an opportunity and a risk. The opportunity is a pool of well-funded buyers actively seeking acquisitions. The risk is that most independent owners do not understand how DSOs evaluate practices, which means they often enter negotiations without knowing their own leverage.

How DSOs Are Different From Individual Buyers

An individual dentist buying a practice typically uses SBA financing, looks at the practice from a clinical operations standpoint, and makes decisions based on revenue, patient volume, and location. The evaluation is relatively straightforward.

A DSO evaluates a practice through a different lens entirely. DSOs are building scalable platforms. They are not just buying a revenue stream. They are buying an asset that fits into a larger system. That means they evaluate practices on criteria that individual buyers rarely prioritize.

What DSOs Look For

EBITDA quality is the primary metric. DSOs calculate earnings before interest, taxes, depreciation, and amortization and apply a multiple to that number. The multiple they are willing to pay depends on the size of the practice, the quality of the earnings, and how well the practice fits their acquisition criteria. Larger practices with cleaner financials and strong EBITDA margins consistently command higher multiples.

Systems and transferability matter significantly. DSOs are buying practices they intend to integrate into an operational platform. A practice with documented systems, a stable team, and processes that do not depend on the owner integrates more cleanly and commands a premium. A practice where the owner is the system creates integration friction that reduces the offer.

Geographic fit is a real consideration. DSOs often have target markets where they are building density. A practice in a market where a DSO is actively developing a cluster of locations may receive a more competitive offer than an identical practice in a market where they have no presence.

Associate structure and staffing stability are evaluated carefully. A practice with tenured hygienists and assistants, and a producing associate who plans to stay through a transition, is significantly more attractive than a practice where the owner is the only producing dentist.

Deal Structure Considerations

DSO deals are rarely as simple as a cash purchase at closing. Many include earn-out provisions where a portion of the purchase price is paid over time based on practice performance post-acquisition. Some include equity rollovers where the selling dentist takes a portion of the purchase price in DSO equity rather than cash. These structures are not inherently bad, but they require careful evaluation.

Understanding the total consideration, not just the headline number, is essential before accepting or declining any DSO offer.

The Window May Be Narrowing

Analysts suggest that DSO acquisition multiples, which were strong through 2024 and 2025, may plateau as more practices hit the market simultaneously. Owners who prepare now, understand their current value, and address gaps before entering negotiations are consistently better positioned than those who wait until they are ready to sell to understand what their practice is worth.

If you want to understand how a DSO would evaluate your practice today, the Marcaro Group Practice Valuation Assessment walks through exactly that analysis. Schedule a call to find out where you stand.