Who Buys Your Buyer? Underwrite the Second Check Before You Roll Equity

Heartland just bought a 33-practice DSO. If you plan to sell and roll equity, ask who buys your buyer, and what your second check looks like when they do.

By Tim McNeely, CFP®, CIMA®, CEPA®, CPFA® | LifeStone

The biggest DSO in the country just bought another DSO.

Not a practice. A network of 33.

Picture a doctor who sold to Foundation and rolled equity. She picked the partner. She read the letter. She signed. On October 2, her partner got a new owner.

If you plan to sell and roll equity, ask the hard question now. Who buys your buyer? And what does your second check look like when they do?

What just happened

Heartland Dental closed on Foundation Dental Partners, a doctor-focused DSO with 33 supported practices across Georgia, Tennessee, South Carolina, and Kentucky (company release, October 2, 2026). Truist Securities was Foundation's lead financial advisor, with DLA Piper as counsel. Ropes & Gray advised Heartland. Terms were not disclosed.

Heartland is not slowing down. In the past 13 months it also added Smile Design Dentistry and its 60 supported practices, Inspire Dental Group, and nearly two dozen solo practices. Its de novo program has opened 51 offices in 2026, with a goal of 68 by year end. Heartland now cites 3,200+ doctors in 1,960+ locations across 39 states and DC. KKR is the majority owner.

Here is what lands on your desk. Foundation's doctors chose a partner. Now that partner has a new owner. Any equity they rolled rides on a different balance sheet than the one they signed up for. Not good. Not bad. Just real. Most owners never underwrite it before they sign.

Same two weeks. Very different second checks.

Named buyers kept closing at the practice level too.

MB2 Dental partnered with Hawaii Pacific Dental Group in Honolulu (LevinPro, September 30). TUSK Practice Sales was the seller's exclusive financial advisor. LevinPro calls it MB2's 14th acquisition of 2026. Terms not disclosed.

Specialty1 Partners formed a joint venture with Greater Waterbury Oral & Maxillofacial Surgeons in Connecticut (company release, September 30). Specialty1 now cites 226 locations across 29 states. Terms not disclosed.

Imagen Dental Partners acquired Fossil Creek Family Dentistry in Fort Worth, Texas (LevinPro, September 25). Its 11th practice transaction of 2026. Terms not disclosed.

Operation Dental, which calls itself dentist-led and not private equity backed, added two Florida Panhandle practices (company release, September 24). Names and terms not disclosed.

One platform deal. One solo practice with a named banker. One specialty JV. One Texas tuck-in. One buyer with no sponsor clock. Same two weeks. Very different second checks.

Practice multiples held. The buyer pool is changing shape.

TUSK Practice Sales' Q3 2026 Dental M&A Market Report puts what private owners actually receive at 5 to 9x EBITDA, depending on size and quality. Flat for two years. But the gap between the best offer and the middle offer has never been wider, per TUSK. Their example: a two-location general practice with $500,000 of EBITDA might draw offers at 6.8x, 7.2x, and 7.6x. That is roughly $3.4 million to $3.8 million before anyone negotiates.

TUSK also says roughly 35% of dentistry is now consolidated. The five largest DSOs support 5,600+ practices between them.

Now the forward view. In TUSK's consolidation arc, early rounds pay 8 to 10x or more. As a sector nears full consolidation, buyer competition narrows and practice multiples "will likely settle into the 4 to 7x range." TUSK puts dentistry in the middle of that curve today. That is a forecast, not a print. But Heartland buying a 33-practice DSO is what the middle of the curve looks like.

Why do platforms sell for more than practices? Size. CT Acquisitions' 2026 note, citing Skytale and Provident, puts regional groups with $3-10 million of adjusted EBITDA near 8.0-11.0x. Platforms above $10 million sit near 10.0-15.0x. Foundation's price was not disclosed. We will not guess it.

The point is the gap. Your practice sells at a practice multiple. The group holding your rolled equity may later sell at a platform multiple. That gap is the whole reason rollover exists. It only pays if the next sale happens on good terms.

Structure still decides the wire. TUSK says DSO offers typically lead with 60 to 80% cash at close. The rest comes as JV or HoldCo equity.

Same sale. Different keep.

TUSK calls the next sale the second bite. Most DSOs are owned by private equity, which typically holds a group 3 to 5 years, grows it, and sells it to the next investor. If you rolled equity, a real share of your payout depends on that next sale. Foundation's doctors just lived it. Once your equity sits on someone else's cap table, your timeline is not your own.

Not all rolled equity is the same asset. TUSK splits it two ways:

  • JV or sub-DSO equity tracks your own practice or regional group after close. You can see it.
  • HoldCo equity tracks the parent company, its debt, and its sponsor's exit clock. You cannot see much of it.

Specialty1's Waterbury deal is a JV. Heartland buying Foundation is a HoldCo-level event. Know which one is in your letter before you argue about the multiple.

And not every buyer runs on a sponsor clock. Operation Dental says it is not private equity backed. That does not make it better or worse. It makes it a different game. Know which one you are playing.

CEG Insights measured the gap owners feel here. In The Great Entrepreneurial Wealth Migration (2025, n = 3,108), 79.2% of owners want guidance on nonliquid assets. Only 17.2% say they get it. Rolled equity is a nonliquid asset. In the same study, 84.6% want business succession planning. Only 21.7% get it. The LOI will not wait for that gap to close.

Five questions before any LOI becomes the plan

Take these to counsel and your advisor:

  1. Is my rolled equity at the practice or JV level, or at the parent HoldCo?
  2. If the parent is sold, recapitalized, or merged into a bigger DSO, what happens to my shares? Do I get a vote?
  3. How long does this sponsor typically hold, and where are they on that clock today?
  4. What sits ahead of my equity: debt, preferred shares, management fees?
  5. What after-tax number do I need from cash at close alone, if the equity goes to zero?

That is not a personal plan. It is the pre-work that keeps the LOI from becoming one.

So what for you

If you are three to five years from a sale, the question is not whether buyers exist. They do. Heartland, MB2, Specialty1, Imagen, and Operation Dental all closed in the same two weeks. The question is which buyer's future you want to own a piece of. Your second check is a bet on them, not on you.

Heartland and Foundation are a free lesson. The group you pick may not be the group that pays you out. Underwrite the buyer of your buyer, or the multiple you celebrate at close will not be the money you keep.

Before you sign

Say a serious LOI lands in 90 days. Could you answer these three?

  1. What cash do you keep after tax if the rolled equity is worth nothing?
  2. Is your equity at the practice level or the parent level, and who is likely to buy the parent?
  3. What happens to your shares if your buyer gets bought?

That is the Dental Exit Stress Test. Not a pitch deck. A clear pass on structure and keep-after-tax, before the letter becomes the plan.

If you want to walk through it, book a 25-minute Exit Stress Test. We will run your deal, or the one you expect, through it together.

No pressure. Just a clear read before you sign.

So, who is reading your buyer's balance sheet on your behalf?

Sources

  1. Heartland Dental / PR Newswire - Heartland Dental Welcomes Foundation Dental Partners into Its Supported Network (Oct 2, 2026). https://www.advfn.com/stock-market/stock-news/99423405/heartland-dental-welcomes-foundation-dental-partne
  2. StreetInsider reprint - same release. https://www.streetinsider.com/PRNewswire/Heartland+Dental+Welcomes+Foundation+Dental+Partners+into+Its+Supported+Network/27139528.html
  3. Becker's Dental Review - Heartland Dental affiliates with Foundation Dental Partners (Oct 2026). https://www.beckersdental.com/dso-dpms/heartland-dental-affiliates-with-foundation-dental-partners/
  4. LevinPro - MB2 Dental Expands Footprint with Hawaii Pacific Dental Group Deal (Sep 30, 2026). https://healthcare.levinassociates.com/2026/09/30/mb2-dental-expands-footprint-with-hawaii-pacific-dental-group-deal/
  5. Specialty1 Partners / PR Newswire - JV partnership with Greater Waterbury Oral & Maxillofacial Surgeons (Sep 30, 2026). https://www.prnewswire.com/news-releases/specialty1-partners-expands-network-through-new-joint-venture-partnership-with-greater-waterbury-oral--maxillofacial-surgeons-302894777.html
  6. LevinPro - Imagen Dental Partners Acquires Fossil Creek Family Dentistry (Sep 25, 2026). https://healthcare.levinassociates.com/2026/09/25/imagen-dental-partners-acquires-fossil-creek-family-dentistry/
  7. Operation Dental - Acquires Two More Dental Practices in the Florida Panhandle (Sep 24, 2026). https://operationdental.com/operation-dental-acquires-two-more-dental-practices-in-the-florida-panhandle/
  8. Group Dentistry Now - DSO Deal Roundup, September 2026 (Oct 1, 2026). https://www.groupdentistrynow.com/dso-group-blog/dso-deal-roundup-2/
  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. CT Acquisitions - Dental/DSO M&A Multiples Report 2026 (updated June 29, 2026). https://ctacquisitions.com/guides/dental-dso-ma-multiples-2026/
  11. CEG Insights - The Great Entrepreneurial Wealth Migration (© 2025), n=3,108

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