How Much Will You Actually Keep After Selling Your Dental Practice to a DSO?
What you keep after a DSO sale is less than the headline price. See how debt, deal costs, taxes, earnouts, and rollover equity shrink it.
By Tim McNeely, CFP®, CIMA®, CEPA®, CPFA® | LifeStone
What you keep after selling your practice to a DSO is usually a good deal less than the headline price, because debt payoff, deal costs, taxes, earnouts, and rollover equity all come out or get held back first. How much less depends on the deal structure, and you can model it before you sign anything.
The number in the letter of intent is real. It just isn't the number that lands in your bank account. This page walks you from one to the other.
Who sets the value of my dental practice?
Not me. A practice broker or a qualified appraiser sets the value of your practice. That is their job, and you should hire a good one.
My job is different. I model what you actually keep under each deal structure. All cash at close. Cash plus an earnout. Cash plus rollover equity. Some mix of all three. Same headline price, very different results in your account.
What multiple are DSOs paying right now?
According to TUSK Practice Sales' Q3 2026 Dental M&A Market Report, practice-level multiples have held at 5 to 9x EBITDA, depending on size, profitability, and quality. TUSK expects that band to hold into 2027. For a deeper look at how buyers get to that number, read how DSO valuation multiples work in 2026.
TUSK gives a simple example. A two-location general practice with $500,000 of EBITDA might receive initial DSO offers at 6.8x, 7.2x, and 7.6x. That is roughly $3.4 million to $3.8 million in enterprise value.
Here is the line in that report that matters most to you: the headline figure "is not what lands in the seller's account." What you receive depends on the structure behind the offer.
How much of a DSO offer is cash at close?
TUSK reports that DSO offers typically lead with 60 to 80% of the value as cash at close. The balance is usually rolled into JV or HoldCo equity.
So on any offer, a real slice of the price is not cash on day one. It is a stake in the buyer's business. That stake can grow. It can also shrink.
From sale price to what you keep: a walk-through
Use this as a checklist. Put your own numbers in each line. The dollar figures below are an illustrative example built on TUSK's sample practice, not a client result and not a prediction.
Illustrative example only: $500,000 EBITDA x 7.2 (the middle of TUSK's sample offers) = $3,600,000 headline price. Cash at close at TUSK's typical range of 60% to 80%.
| Step | What it is | Illustrative example |
|---|---|---|
| Headline sale price | The enterprise value in the LOI | $3,600,000 |
| Minus the non-cash portion | Usually rollover equity in the buyer. Some deals also carve an earnout out of this slice. Not cash at close, at risk, and you can't easily sell it | $720,000 to $1,440,000 (20% to 40%) |
| = Cash at close before payoffs | The cash portion of the deal | $2,160,000 to $2,880,000 (60% to 80%) |
| Minus debt payoff | Practice loans, equipment loans, lines of credit paid off at closing | Your payoff letters |
| Minus deal costs | Broker, legal, and accounting fees | Your engagement letters |
| Minus escrow or holdback | Money held back at close until release conditions are met | Depends on your terms |
| Minus taxes | Federal and state tax on the sale, based on how each piece is taxed | Your CPA's estimate |
| = What lands in your account at close | The cash you actually keep on day one | Your real number |
Rollover equity and earnouts are not lost money, but they are not money in hand either. And the bottom line can only be filled in with your own debt, fees, and tax picture. That is why it is worth modeling.
If you have an LOI on your desk, or expect one this year, book your 25-minute Exit Stress Test and we will walk your offer through this table together.
What comes out before you get paid?
Debt. Any loans tied to the practice usually get paid off at closing, out of your proceeds.
Deal costs. Your broker, your attorney, and your CPA all get paid. Ask each one for their fee in writing, early.
Taxes. Not every dollar of the price is taxed the same way, and your state matters too. How the deal is structured can change what you keep after tax, so have your CPA and attorney run these numbers with you before the terms are agreed.
Escrow. TUSK notes that escrow is held back at close, earns no interest, and that release conditions are negotiable. Know what releases the money and when.
Is rollover equity the same as cash?
No. Rollover equity is a piece of the buyer's business that you keep instead of taking cash. TUSK describes two common types. JV or sub-DSO equity tracks how your own practice or regional group performs after closing. HoldCo equity is often called "the second bite," and TUSK notes that its value depends heavily on when you enter the buyer's hold period and on the health of the buyer's balance sheet.
Rollover can work out well. It can also lose value. Treat it as an investment with risk, not as cash in the bank.
Is an earnout guaranteed money?
No. An earnout is paid only if future targets are hit. TUSK points out that the buyer usually calculates post-close EBITDA, not the seller. So before you count any earnout dollars, confirm the targets are realistic and you understand exactly how they are measured.
Why the same price can leave you with different amounts
Picture two offers at the same price. One pays more at close with a small rollover. The other pays less at close with a bigger rollover and an earnout. On paper they look equal. On day one, they are not.
TUSK also reports that the spread between the best offer and the middle offer is the widest it has been. In its example, the three offers are $400,000 apart before a single term is negotiated. Price matters. Structure matters just as much.
When should I model what I keep?
Before you sign the LOI. Once you sign, your leverage drops and the structure is mostly set. If you model each offer side by side first, you can see which one actually puts more in your account and ask for the terms that matter to you. Here is how to stress-test your plan before the LOI.
FAQ
Is rollover equity cash?
No. Rollover equity is ownership in the buyer's business, not cash at close. It can grow or lose value, and you usually can't sell it whenever you want.
Is an earnout guaranteed?
No. An earnout is contingent. You get paid only if the practice hits the agreed targets after closing, and the buyer usually does the math.
When should I model what I keep?
Before the LOI. That is when you still have room to compare structures and negotiate the terms that change your take-home number.
The next step
You built this practice. You deserve to know your real number before you sign, not after. Your broker or appraiser tells you what it is worth. I help you see what you keep under each offer.
This page is educational and is not personal tax, legal, or financial advice, so please talk with your CPA and attorney about your situation.