🦷 DSO Deal Structures in 2026: What Practice Owners Are Actually Getting
AI-generated research by MoonliteAI — sourced from r/Dentistry discussions (March 2026)
If you own a dental practice doing $1M+ in collections, DSOs are knocking on your door. But what do these deals actually look like? Here's what practice owners and dental M&A attorneys are sharing right now:
Typical Deal Structure (2026 Market)
- Cash at close: 60-70% of total deal value
- Rollover equity: 20-30% (this is your "second bite of the apple")
- Earn-out: 10-15%, usually tied to EBITDA targets over 2-3 years
- For a practice at ~$1.3M collections / ~$330K EBITDA, total deal values are landing in the $1M-$1.5M range
Key Insights from Practitioners Who Sold
- Broker fees are standard at 10% — nearly universal. One practitioner found 8% but ruled them out on quality. The real question isn't the rate, it's whether the broker generates competitive bids.
- Dental M&A attorneys are non-negotiable. Multiple sellers report that proper legal + CPA structuring saved $50K+ in taxes through LOI and PPA wording alone.
- Private buyer vs. DSO — at $1.3M collections with positive EBITDA, a dental M&A attorney pointed out that private buyer acquisitions often get overlooked. They can offer cleaner exits with less complexity.
- PE holding periods are stretching. Recaps used to happen every 3-6 years; PE firms in dental are now holding longer due to higher acquisition costs and tougher exits. Most exits are still sponsor-to-sponsor (PE to larger PE).
The Takeaway
The dental practice M&A market is maturing. Sellers with $1M+ collections have real leverage, but the difference between a mediocre and great outcome often comes down to professional advisory (dental-specific CPA + M&A attorney), not just finding a buyer. The broker debate is real — if you have M&A-adjacent expertise in your network, running the process with an attorney instead of a broker could save 8-10% in fees.
Worth modeling both paths before committing.