Understanding Private Equity vs. DSO Sales

Practice owners need to educate themselves about the differences between private equity sales and Dental Service Organization (DSO) purchases, especially regarding valuations and structures. Private equity usually seeks practices with an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $2 million or more, viewing these businesses as platforms for growth. Conversely, DSOs often have established infrastructure, which allows them to offer lower multiples on higher EBITDA figures, as they do not require the existing practice's systems. The choice between these options ultimately depends on the specific goals and conditions of the practice owner.