NMDA Journal Winter 2019

New Mexico Dental Journal, Winter 2019 To Sell or Not to Sell to a DSO That is the Question By Marie Chatterley Many dentists today are approached by different dental service organizations (herein referred to as “DSO”) about selling and/or merging their practice with their organiza- tion. That’s because these DSO’s (corporations, private investors, private equity groups) have developed a strong appetite for dental practices and want to create substan- tial equity gain and strong dividends in their company. As a general rule, a DSO uses income-based valuation methods to evaluate investment opportunities. For exam- ple, a general dental practice will typically sell at a price in the range of four to six times its adjusted net income. Un- fortunately, most practices do not fit the DSO“foot print”, i.e., they do not fall within the parameters most DSO’s have set for practices they would be interested in acquiring. 20 continues on page 22 