The Dentalpreneur Podcast w/ Dr. Mark Costes

1931: The Ongoing DSO Evolution Pt. 2

Mar 1, 2024

In this podcast, they discuss the complexities of dental practice sales, comparing holdco equity with joint venture models. They explore how a practice's value can surge during a recapitalization event and the risks involved. They touch upon the benefits of joint venture models and emerging hybrid options for practice sellers.

34:23

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Episode guests

Brannon Moncrief

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Quick takeaways

Consider the financial implications and risks when choosing between hold co-equity and joint venture models for selling dental practices.

Evaluate the balance of ongoing income, diversification, and recap proceeds to make an informed decision on the optimal DSO offer for your dental practice sale.

Deep dives

Different Models for Selling Dental Practices

The podcast discusses different models for selling dental practices to Dental Service Organizations (DSOs), highlighting the variations between the hold co-equity and joint venture structures. In the hold co-model, the dentist sells 100% of the practice but retains stock in the parent company, offering diversification benefits but potentially limiting ongoing income. Conversely, the joint venture model involves selling 51-70% of the business for cash, retaining equity in the practice, and sharing EBITDA with the DSO, ensuring ongoing income but limiting full exits at recap.

Introduction

2min

Exploring DSOs and Sale Models in the Dental Industry

4min

Exploring Dental Service Organization Models

12min

Benefits of Working with Maverick Dental Lab

2min

Strategic Financial Planning in Dental Practice Ownership

10min

Insights on Valuation and Investment Returns in Dental Practices

4min

On today’s part-2 episode, Mark continues his conversation with Brannon Moncrief, CEO of McLerran & Associates. They dive into the intricacies of dental practice sales, comparing the holdco equity model with joint venture models. Brannon sheds light on the varying financial outcomes these models can have for dentists, particularly those who have scaled back their clinical hours. They also discuss how a dental practice's value can surge during a recapitalization event and the factors influencing this increase. The discussion pivots to the inherent risks in the holdco model, such as the possibility of doctor turnover post-recap and the difficulties in predicting investment returns. Mark and Brannon explore the benefits of joint venture models, including the advantages of continuous EBITDA distributions and potentially higher returns at the time of recap. Lastly, they touch upon the emerging hybrid models that aim to blend the best aspects of holdco and joint venture structures to offer a balanced option for practice sellers.

For a more detailed exploration of these topics and to learn how these different business structures could impact your dental practice sale, tune into the full episode. Don't forget to follow the podcast for more valuable insights into the dental industry, and for personalized consulting services or strategic advice, reach out to Brannon Moncrief at McLerran & Associates.

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The Dentalpreneur Podcast w/ Dr. Mark Costes

1931: The Ongoing DSO Evolution Pt. 2

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Different Models for Selling Dental Practices

Financial Implications and Risk Factors in Selling Practices

Considerations for Dentists Selling Practices

Remember Everything You Learn from Podcasts