Tune in to our podcast series: The Dental Board Room
Listen Now

The Evolution of Deal Structures in the DSO Space

by Drew Phillips, CPA | August 3, 2023

We’ve seen a consistent trend toward consolidation in the dental space for the last 15 years. But coming out of the pandemic, the DSO marketplace is changing.

And if you’re thinking about selling your practice to a Dental Service Organization, it’s useful to understand the different deal structures available to you.

So, how are DSO deal structures evolving in a post-COVID world? And how can a dental lawyer help choose the option that’s right for you?

Dean Gould serves as Senior Attorney at Dykema, where he specializes in dental law and the DSO transaction space.

On this episode of the podcast, Dean joins host Drew Phillips to explain why DSOs are moving toward joint venture deals and how the site-level equity structure prioritizes income replacement and encourages organic growth.

Dean discusses the benefit of building a team of legal and financial advisors before you sell to private equity and describes how a dental lawyer can help structure a win-win scenario for you and the DSO at the LOI stage, giving you clarity and confidence prior to the resource-heavy due diligence process.

Listen in for Dean’s predictions around the success of doctor-centric DSOs and learn how to choose a deal structure that fits your risk tolerance and benefits you and your dental practice for the long term.

Topics Covered

[3:54] What’s behind the trend to JV (also known as site-level equity) deals in the DSO space

[8:35] How different DSO ownership structures play out when a doctor exits the business

[13:50] The risk/reward profile of site-level equity deals vs. ownership at the holding company level

[18:40] How nuanced the terms can get around participating in recapitalization events

[22:08] How DSOs are incentivizing doctors to work past their 3- or 5-year workback agreements

[24:45] How doctors can take care of younger associates in negotiations with DSOs

[27:30] What DSOs are doing to prioritize income replacement and encourage organic growth

[31:11] How dental lawyers can help you with term sheets, LOIs, purchase agreements, new employment agreements, equity documents and lease arrangements

[35:36] Why private equity companies are growing real estate portfolios alongside their dental holdings

[37:17] Why Dean suggests getting your documents in order and building a team of legal and financial advisors before you sell to a DSO

[41:24] How a dental lawyer can help structure a win-win scenario for you and the DSO at the LOI stage, giving you clarity and confidence prior to the resource-heavy due diligence process

[45:29] Dean’s predictions around the evolution of specialty play platforms and the success of doctor-centric DSOs

[49:38] How to register for Dykema’s industry-leading DSO conference in Denver this July

Connect with Dean Gould 

Dykema

Dean on LinkedIn

Email dgould@dykema.com

Connect with Wes Read & Drew Phillips

Practice CFO

Practice CFO on Instagram

Practice CFO on Facebook

Practice CFO on YouTube

Resources

Dykema DSO Conference 2023

What our clients say
Are you ready to get started with PracticeCFO?
Pick Your CFO Team
Subscribe to our newsletter to receive news, updates, and valuable tips.
Footer Newsletter Signup

This will close in 0 seconds