Dental Unfiltered
Episode 56 - Dental Office Valuations w/ Brannon Moncrief
Jan 8, 2025
In this engaging discussion, Brannon Moncrief, CEO of McLerran & Associates, shares his expertise in selling dental practices. He breaks down the differences between private equity and DSO purchases, shedding light on the critical role of EBITDA in valuations. Listeners learn what makes a practice attractive to potential buyers and the vital considerations post-sale, including performance incentives. Brannon emphasizes how a strong leadership team and strategic alignment can greatly influence a practice's selling potential.
48:02
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Quick takeaways
- Understanding the differences between private equity and DSO purchases is vital for owners to navigate the sale of their dental practices effectively.
- EBITDA plays a critical role in dental practice valuations, necessitating careful calculation and transparency for maximizing sale outcomes.
Deep dives
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.
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