Selling Your Dental Practice to a DSO? Buyers Now Pay for Proof, Not Potential

A DSO buyer used to pay for what your practice could become.

Now they pay for what it has already done.

That one shift runs through this week's dental deal news. And it cuts both ways. The buyer is grading your proof. Who is grading theirs?

The biggest DSO just passed 2,000 offices

Heartland Dental announced on October 21 that it passed 2,000 supported offices. Becker's reports it is the first DSO in the U.S. to reach that mark. Heartland supports more than 10,000 dentists and hygienists. This year it has added more than 106 offices: 55 de novos and 51 through affiliations, per the company release.

Read the split. About half of Heartland's growth this year came from building offices, not buying them.

SALT Dental Partners has done 13 partnerships so far in 2026, with a couple more under letter of intent, CEO Dylan Bates told Becker's (October 22). His warning about the rest of the field was blunt. Some groups, he said, became "an aggregation of a number of brands," and he asks whether they ever became "an operating company." When a DSO ends up "upside down," he named who gets hurt: doctors whose rollover equity "is now impaired or diminished or gone to zero."

Two smaller deals came through this week:

• Espire Dental added three partners in Washington (Becker's, October 22, citing an October 21 LinkedIn post).
• MB2 Dental partnered with Boulton Orthodontics in Cypress, California (TUSK Practice Sales release, October 21).

Neither announcement gave terms.

Cheap money is gone. Here is what one DSO leader says changed

Geith Kallas, DDS, CEO of Smile Makers Dental Center in Tysons Corner, Va., told Becker's (October 23) that from 2019 to 2021 "money was free": 4% loans and 15x EBITDA multiples. In his words, you could "buy a practice, do nothing and make money on arbitrage." From 2023 to 2026, he says, debt runs 9.5% to 11% and multiples sit at 6x to 8x. De novos cost 40% more to build.

That is his view, not a market survey. TUSK's Q3 report has practice multiples holding flat at 5 to 9x. TUSK also says DSO offers typically lead with 60 to 80% of the value as cash at close, with the balance rolled into joint venture or holding company equity.

His conclusion: "Only operators who can create EBITDA, not just buy it, will survive." He predicts a number of DSOs that grew on cheap debt will go bankrupt in the next 18 months. Treat that as one operator's forecast. He also expects rates to come down to 6% to 7% eventually, and multiples to recover. But he says the era of "buy any practice and grow" is over for now.

What DSO buyers look for before they make an offer

When money was cheap, the next sale could bail out the math. Buyers now look harder at two things.

1. Proof over promise. Becker's put it this way in its own introduction (October 22): what a practice is worth "depends less on its potential and more on what it has already proven." The advice that follows came from four dental executives at its Future of Dentistry Roundtable.

• Ray Caruso of Lone Peak Dental Group told sellers: "Don't add Saturdays or Friday afternoons that you're going to take away later." His reason: "You're only looking at the trailing 12 months, and I'm going to do the math."
• Jason Lockwood of Flagship Specialty Partners pointed to clean revenue cycle and books, and personal expenses kept out of the books.
• Lauren Riley, operations director at Billerica Dental Associates, named stable staff and well-kept equipment.

2. A work term. Lockwood said his group is "looking for a minimum commitment of five years." He warned against waiting until you are two years from retirement: most DSO buyers, he said, would say that "will absolutely hurt you." Becker's adds that more DSOs now require a post-close employment term.

Andy Schroeder of Imagen Dental Partners told Becker's (October 19) that private equity's dental ownership needs a "cleanup" over the next three to five years. He is already seeing groups that "promised the next recap and the second bite of the apple" and have not been able to make it happen. The doctors who feel that most, he said, are the ones counting on a payout at retirement.

Proof runs in two directions

Your proof. Can you show steady production that does not depend on you in the chair? Are your personal expenses already out of the books, or will a buyer's accountant find them first? Every dollar of EBITDA you can prove is a dollar a buyer can count. Every dollar you cannot prove is one they will question.

Their proof. Caruso's advice to sellers was to ask the buyer the same questions the buyer asks you: "Look at their balance sheet and see what's going on with them." Bates's test is a good one: is this an operating company, or a pile of brands with a logo on top? Kallas's test is another: does this group create EBITDA, or only buy it? And if a group grew on cheap debt, what does that mean for the equity you roll?

State rules for private equity in healthcare are moving too

Becker's (October 22) listed five laws passed so far in 2026, drawn from the Private Equity Stakeholder Project's state policy review: Illinois HB5000, two Maine laws (HB2201 and HB2202), Vermont H583, and Washington HB2548. The Project says Maine's HB2201 lets the state approve, impose conditions on, or reject covered private equity deals. As of August it counted nine laws in six states, while California and Oregon began carrying out major laws passed in 2025.

Not every one of these reaches a dental-only sale. Maine's 180-day notice rule, for one, excludes providers that offer only dental services. Which ones touch your deal is a question for your attorney.

Research I helped underwrite shows how fast entrepreneurs move when the moment comes. In a 2025 study of 3,108 entrepreneurs, 34.2% make major financial decisions within a week. 24.5% decide within a day. 12.6% make instant decisions.

A buyer will test your proof line by line. A lot of entrepreneurs make their big money calls in days.

What this means for you

If your numbers only hold up when you are in the chair, a buyer will see that. If they hold up on systems and people, a buyer will see that too. That is the gap between a thin offer and a strong one.

And if you take rollover equity, your second payday rides on a company you did not run and may not have checked. Picture two DSOs making the same headline offer. One builds offices and grows profit. The other grew on debt and is counting on its next sale to make the math work. Same offer on paper. Very different odds.

Key takeaways

• Becker's says what a practice is worth now depends less on potential and more on what it has already proven.
• Debt costs more and multiples are lower than in 2019 to 2021, per one DSO leader's account and TUSK's Q3 range.
• Rollover equity is only as good as the company behind it. Bates says some of it has gone to zero.
• One DSO CEO, Lockwood, wants a minimum commitment of five years after the sale. Becker's says more DSOs now require a post-close work term.
• About half of Heartland's growth this year came from new builds, half from affiliations.
• States keep writing private equity rules for healthcare. Whether a given law reaches a dental-only sale is a question for your attorney.

Test your own proof before a buyer does

Which numbers in your practice could you prove tomorrow, and which ones only live in your head?

If a buyer offered rollover equity, what would you want to know about their debt before you signed?

Who is testing the buyer while the buyer tests you?

If those questions land, the Dental Exit Stress Test is a complimentary 25-minute call. We look at your numbers, the offer, the taxes, and what you keep. Book your 25-minute Exit Stress Test.

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Sources

1. Heartland Dental release, Oct 21, 2026. https://www.prnewswire.com/news-releases/heartland-dental-reaches-2-000-supported-dental-offices-expanding-its-doctor-led-culture-and-support-model-nationwide-302914622.html
2. Becker's, Heartland becomes 1st DSO with 2,000 supported locations, Oct 21, 2026. https://www.beckersdental.com/dso-dpms/heartland-dental-becomes-1st-dso-with-2000-supported-locations/
3. Becker's, Why some DSOs have gone "upside down," Oct 22, 2026. https://www.beckersdental.com/featured-perspectives/why-some-dsos-have-gone-upside-down-exec/
4. Becker's, The biggest challenges facing DSOs, Oct 23, 2026. https://www.beckersdental.com/featured-perspectives/the-biggest-challenges-facing-dsos/ and What the cheap-money era has taught DSOs, Oct 23, 2026. https://www.beckersdental.com/featured-perspectives/what-the-cheap-money-era-has-taught-dsos/
5. Becker's, 4 dental executives on how to boost practice value before selling to a DSO, Oct 22, 2026. https://www.beckersdental.com/featured-perspectives/4-dental-executives-on-how-to-boost-practice-value-before-selling-to-a-dso/
6. Becker's, Why a "cleanup" is needed for private equity in dentistry, Oct 19, 2026. https://www.beckersdental.com/featured-perspectives/why-a-cleanup-is-needed-for-private-equity-in-dentistry-exec/
7. Becker's, 5 new laws for dental leaders to know, Oct 22, 2026. https://www.beckersdental.com/dentists/lawmakers-target-healthcare-oversight-5-new-laws-for-dental-leaders-to-know/ Maine enacted bill text (dental-only exclusion): https://legislature.maine.gov/backend/App/services/getDocument.aspx?documentId=124206
8. Private Equity Stakeholder Project, States broaden scrutiny of private equity in healthcare, Sep 22, 2026. https://pestakeholder.org/news/states-broaden-scrutiny-of-private-equity-in-healthcare/
9. TUSK Practice Sales, Q3 2026 Dental M&A Market Report. https://2479577.fs1.hubspotusercontent-na1.net/hubfs/2479577/TUSK_Dental_Q3_2026_Market_Report%20Final.pdf
10. Becker's, Espire Dental adds 3 Washington partners, Oct 22, 2026. https://www.beckersdental.com/dso-dpms/espire-dental-adds-3-washington-partners/
11. TUSK Practice Sales, Boulton Orthodontics partnership with MB2 Dental, Oct 21, 2026. https://tuskpracticesales.com/newsroom-posts/tusk-advises-boulton-orthodontics-in-its-partnership/
12. Research I helped underwrite: CEG Insights, The Great Entrepreneurial Wealth Migration (2025, n = 3,108), p. 7.

This article is for educational purposes only and is not tax, legal, or investment advice. Consult your own qualified professionals about your situation.