In the current dental market, DSOs (Dental Support Organizations) have shifted their acquisition strategies to mitigate financial exposure, a move described as "de-risking". This shift has significant implications for dentists looking to sell their practices, particularly regarding how much cash they receive at the closing table.

The End of the "Heyday"

Previously, dental transitions were often "home runs" for sellers, who could expect to receive significantly more at closing than they would from a private buyer. During the "fast and furious" pre-COVID era, money was cheap, and private equity-backed groups were buying practices aggressively.

However, this market has undergone a correction:

• Vanishing FOMO: The "Fear Of Missing Out" that drove sellers has largely disappeared as market conditions have tightened.
• Expensive Capital: Money is no longer "cheap," causing private equity funding to dry up for many groups.
• Margin Pressures: Rising costs for hygienists and dental assistants have squeezed profit margins, making it harder for DSOs to service debt.

DSOs are now focusing on de-risking by pushing more of the transaction's financial risk onto the selling doctor.

• Decreased Cash at Closing: While sellers used to expect roughly 80% of the enterprise value in cash at closing, that figure has frequently dropped to between 50% and 60%.
• Rollover Equity Risks: A larger portion of the practice value is being held back as equity in the parent company. Attorneys note that some DSOs have recently informed partners that their internal shares currently have "zero value".
• Stock-Based Earn-Outs: Future payouts (earn-outs) that were previously paid in cash are now often being structured as 50% cash and 50% stock.
• Unique Holdbacks: Buyers are implementing new types of holdbacks, such as those for Accounts Receivable (AR), that were not common in previous years

Shifting Payout Structures

DSOs are now focusing on de-risking by pushing more of the transaction's financial risk onto the selling doctor.

• Decreased Cash at Closing: While sellers used to expect roughly 80% of the enterprise value in cash at closing, that figure has frequently dropped to between 50% and 60%.
• Rollover Equity Risks: A larger portion of the practice value is being held back as equity in the parent company. Attorneys note that some DSOs have recently informed partners that their internal shares currently have "zero value".
• Stock-Based Earn-Outs: Future payouts (earn-outs) that were previously paid in cash are now often being structured as 50% cash and 50% stock.
• Unique Holdbacks: Buyers are implementing new types of holdbacks, such as those for Accounts Receivable (AR), that were not common in previous years.

Increased Retention Requirements

To further de-risk the acquisition, DSOs are requiring sellers to stay on as providers for longer periods.

• Clinical Stability: A practice is considered a safer acquisition as long as the seller remains on-site to maintain patient and team stability.
• Longer Commitments: While three-year stay-on periods were standard, many DSOs now require five-year commitments from the selling doctor.
• Team Continuity: DSOs fear that if the owner leaves too soon, the dental team—and the patients—will follow.

The Private Buyer Advantage

Because DSOs are offering less cash upfront and requiring longer work commitments, the gap between corporate and private offers has narrowed. Private practice buyers now have a solid chance to compete by appealing to the seller's desire to protect their staff and legacy, offering a simpler transition compared to complex DSO equity structures.

Buying a Dental Practice | Selling a Dental Practice | Dental Practice Acquisition

Stop gambling with your retirement. Learn why 7 separate DSOs just told partners their shares are worth zero and how to protect your equity in the current market correction with titans Ali Oromchian and David Cohen.

In this episode, Michael Dinsio and Paula Quinn sit down with dental attorneys Ali Oromchian (DM Counsel) and David Cohen (Cohen Law Firm, PLLC) to discuss the shifting dental industry. As the era of "cheap money" vanishes, our guests reveal how DSOs are de-risking by offering less cash at closing and pushing more risk onto dental practice ownership through complex rollover equity.

What You'll Find Out:

DSO Red Flags: How to spot clinical interference and financial opacity before signing an LOI.
Equity Realities: Why "rollover equity" can plummet to zero and how to evaluate recapitalization.

Vetting Secrets: The "Random Call" strategy for performing true due diligence on potential buyers.

Market Correction: Why cash at closing has dropped from 80% to 50-60% in current dental transitions.

Private Advantage: How individual dentists can outmaneuver DSOs when buying a dental practice.

Special Guests:Ali Oromchian, JD, LL.M., co-founder of DM Counsel, specializes in dental transitions and employment law, providing expert dental industry advice to thousands of practitioners. David Cohen, JD, founder of Cohen Law, is a leader in dental practice acquisition and high-stakes DSO partnerships across the East Coast. Connect at: https://www.dmcounsel.com and https://cohenlawfirmpllc.com/

Key Takeaway:DSO partnerships are no longer a guaranteed "home run." Success in the modern practice ownership journey requires moving past FOMO to conduct rigorous, data-driven due diligence on your future partner's EBITDA and operational support.

Perfect for: Startup dentists, established owners planning a 7-figure exit, and anyone focused on dental practice financial tips and strengthening dental practices.

Stay Connected to Get More Topics Covered by Dental Unscripted:buying a dental practice, dental business, dental consulting, dental industry, dental practice acquisition, dental tips, dentist journey, dental practice management, selling a dental practice, dental startup, dental practice financials, dental practice revenue, running a dental practice, dental industry advice, dental solutions

Is your team running the show while your grinding away to pay the bills? In this episode, Mike Dinsio, MBA and Paula Quinn, BSDH sit down with Jill Hasselman to expose the silent killers in dental ownership. If you are afraid to correct staff or rely too much on an outdated and generic employee handbook, you are exposing yourself to risk. This episode breaks down the exact dental practice operations needed to protect your license, fire toxic staff safely, and finally sleep at night. Stop being held hostage and avoid toxic situations. And why the "Document or Didn't Happen" strategy prevents lawsuits from sinking your practice.

WHAT YOU'LL LEARN

• Why "borrowing" a colleague's handbook is actually legal suicide for your practice.

• The psychological "Popup" trick that stops employee tardiness immediately.

• Why fighting unemployment claims often triggers expensive wage and hour lawsuits.

• How to document performance issues without being a "jerk."

• The "Document or Die" framework: Why if it isn't written down, it didn't happen.

• Understanding the massive gap in EPLI insurance that leaves most dentists exposed.

PERFECT FOR: Dental practice owners feeling held hostage by their staff, dental startup doctors establishing culture, and anyone seeking dental entrepreneur advice on navigating labor laws and dental teams.

SPECIAL GUEST Special Guest on Today’s Show:
Jill Hasselman is the Chief Growth Officer for HR for Health. With nearly 12 years of experience protecting doctors, she specializes in customized HR compliance and software solutions specifically for the dental industry.
HR for Health was founded by an employment attorney to help doctors prevent lawsuits before they happen.

🔗 Connect with HR for Health: https://www.hrforhealth.com

KEY TAKEAWAY Consistency is your best defense. HR isn't just about following rules; it's about regaining your freedom. By implementing consistent documentation and state-specific policies, you stop being a hostage in your own business and build a dental practice culture that respects your leadership.

STAY CONNECTED FOR MORE INFO ON:
dental practice management, dental business, dental team optimization, dental practice leadership, dental practice operations, running a dental practice, dental practice ownership, dental startup, dental hr, dental entrepreneur advice, dental practice challenges, dental industry insights, dental practice protection, dental leadership

DENTAL UNSCRIPTED:
Website: https://nxlevelconsultants.com/resources/dental-podcast/

WORKING WITH MICHAEL & PAULA:
Michael Dinsio, MBA and Paula Quinn, BSDH are dental practice consultants specializing in startups, acquisitions, and practice management optimization. Their proven frameworks help dentists navigate ownership, improve profitability, and build sustainable practices everywhere!
Website: https://nxlevelconsultants.com

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PRODUCTION
Dental Unscripted
Hosted by Mike Dinsio, MBA & Paula Quinn, BSDH
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