With one or two dental offices, your dental practice’s value will be based on a percentage of collections—say 80%. But when you get to three or more dental practices the valuation method changes to an EBITDA valuation. EBITDA = Revenue – Expenses (excluding interest, taxes, depreciation and amortization). With this change in valuation methods your dental offices together could be worth more than 100% of collections or 3-6 times EBIDTA depending on the number of locations (3 or more is optimum), profitability, location, and dental specialty. When a large DSO adds your dental practices to their portfolio the value of your dental practice to a DSO could be 2-3 times what they paid you for it. When they aggregate the EBIDTA numbers the dental practices become much more valuable as a larger group.
These numbers sound good, but not every DSO or regional group is a good match or the the right buyer for your dental practice. There are a select few groups who really do care about the dentist’s transition as well as their staff, and really do know what they are doing with regards to a large multi-office dental transition. By having a short consultation with Chris Vandiford it will be clear which direction to take and which buyer may be the right fit for your dental transition.
Complete the form below to learn more about how the TransitionOne team can help you with a multi-location practice transition.
3989 Broadway
Suite 150
Grove City, OH 43123