Selling a dental practice to a DSO: what the offer is made of

This guide is general information about how DSO deals for dental practices are put together, not legal, tax or financing advice. Ownership, non-compete and notice rules differ by state and change often, so confirm how they apply to your sale with a dental transaction attorney in your state and your CPA.

What is in a DSO offer for a dental practice?

Cash at closing, plus parts paid later or in equity. Advisors describe the split in different ways. TUSK Practice Sales, a dental M&A advisor, said in a July 2026 press release that DSO offers are structured with 60% to 85% or more of the total consideration paid as cash at close.

In a joint-venture deal, the owner typically sells 60% to 70% of the practice up front, Kim McCleskey, a practice transition consultant with Professional Transition Strategies, wrote in DrBicuspid in June 2024. Attorneys writing about pediatric practices sold to DSOs, in the American Academy of Pediatric Dentistry's Pediatric Dentistry Today (first quarter 2026), add that DSO buyers often hold back part of the price and pay it only if profitability markers are met.

Because each piece is paid on different terms, put every DSO offer into dollars before you compare it with another. On a $2,000,000 offer, for example, TUSK's range means $1.2 million to $1.7 million or more at closing, with the rest paid later or in equity. A dentist buying with an SBA 7(a) loan cannot pay you an earn-out under SBA SOP 50 10 8.1, effective October 1, 2026; the guide to selling to an associate or another dentist covers how those buyers pay.

Who buys which part of your practice?

In one common structure, two different buyers. In the closely aligned arrangement the ADA's guide describes, a professional entity that already works with the DSO typically buys your clinical assets, which the guide calls limited, and the DSO buys the non-clinical assets, including goodwill. You sign an employment agreement with the professional entity, negotiated in conjunction with the purchase agreement. The guide also describes a variation in which the DSO asks you to form a new professional entity to buy the clinical assets.

The ADA says arrangements involving such a sale “are generally irrevocable” and that “there is no going back.” Joseph W. Gallagher of The Health Care Group, writing in AAOMS Today in 2024, describes the clinical practice paying the DSO's management services organization a percentage of practice collections for administrative and operational work.

If any part of your price is an earn-out on the practice's earnings, ask whether the management fee is deducted before those earnings are measured. Some states limit how the fee is set (see state limits below).

How does a DSO value a dental practice?

As a multiple of EBITDA, earnings before interest, taxes, depreciation and amortization. Both advisor ranges below are EBITDA multiples, not multiples of SDE or percentages of collections.

BizBuySell's dental sale data uses seller's discretionary earnings (SDE), which counts the owner's own pay, so for an owner-dentist it includes clinical compensation. In the ADA's closely aligned structure you typically become a salaried employee, so your pay becomes a cost of the practice. BizBuySell's figures are SDE multiples, so they cannot be compared with DSO or private equity EBITDA multiples.

If a DSO is adding your practice to a group it already runs, read the add-on row, not the platform row. FOCUS describes practices under $1 million of adjusted EBITDA as single site, owner-dependent and limited in infrastructure, bought by individual buyers or as small DSO tuck-ins. For the SDE multiples and percent-of-collections rules of thumb used when another dentist buys, see how much a dental practice is worth.

What do DSO buyers check in your numbers?

Hygiene, how much of the dentistry depends on you, and payer mix. In a 2026 whitepaper, FOCUS Investment Banking says buyers treat hygiene revenue as the most recurring and stable part of dental EBITDA, may discount a practice that relies heavily on one doctor, value a balanced commercial and PPO payer mix most highly, and scrutinize Medicaid exposure and cash-pay concentration in diligence.

FOCUS's list of quality factors also covers recall adherence, hygiene-to-doctor production ratios, scheduling efficiency, operational infrastructure and technology such as digital radiography and intraoral scanning. A TUSK partner said in the firm's July 2026 release that DSOs pay close attention to payer mix, and that reimbursement policy is often one of the first things they evaluate. None of these sources puts a number on the discount or the premium.

Before a DSO asks, pull these from your practice management software:

• Production and collections by provider, so the buyer can see how much is yours, how much is your associates' and how much is hygiene.
• Hygiene recall and reappointment rates, and hygiene production as a share of the total.
• Patients and collections by payer: each PPO, fee-for-service, and any Medicaid or CHIP plan.
• Delta Dental Premier and PPO patients, counted separately. One national practice transitions firm, Henry Schein Dental Practice Transitions, reports that in its experience any change in ownership, by full or partial sale, has triggered Delta Dental to reclassify the practice's providers from Premier to PPO at the lower fee schedule. That is one firm's experience, not Delta Dental policy, so ask your own Delta Dental company how it treats a sale.
• Your hygiene team. In April 2026 the ADA Health Policy Institute reported that only 60% of dentists had enough hygienists on staff, and that 91% of dentists who were recruiting or had recently recruited one called it very or extremely challenging. Expect questions about who produces your hygiene revenue and whether they will stay.

What is rollover equity in a DSO deal?

Part of your price taken as equity in the DSO instead of cash, which makes you an owner in its business and can keep you in the practice longer. The ADA's guide says receiving equity in the DSO can lead to longer terms and less ability to terminate your employment arrangement, and that longer terms are not uncommon in agreements with DSO-aligned practices, particularly where the dentist is receiving equity.

Ask how much debt the group carries before you take its equity. Dental Care Alliance, for example, had about 390 practices when Mubadala and funds managed by Harvest Partners took joint control in a recapitalization that closed in December 2022, according to Mubadala's January 2023 release. In an April 27, 2026 release, DCA's counsel Kirkland & Ellis said a transaction backed by all of DCA's existing lenders “will reduce the company's debt by more than $1.1 billion” and extend its debt maturities to 2031.

How long will you keep practicing after a DSO sale?

Often three to five years, a period known as the work-back, though the term is negotiated. ADA News reported in December 2024 that some DSOs want the original dentist to stay on for three to five years to ease the transition. Kim McCleskey wrote that many dentists stay with the practice for about three to five years after a DSO sale, and that tenure is negotiable, with some DSOs agreeing to one to two years and others to five or more.

The attorneys writing in Pediatric Dentistry Today say a DSO buyer will likely require you to keep working clinically, often for three or more years, under an employment agreement the buyer can end. They add that termination could be more likely if you are not meeting production expectations, and that DSO employment likely means lower pay but possibly better benefits.

If you do not want to keep practicing, say so early. A dental CPA quoted in the same ADA News article, Allen Schiff, said many dentists do not want to stay on after they sell, so a DSO is sometimes not an alternative for them.

A DSO will also look at the dentists and team you leave behind. The same attorneys, writing in Pediatric Dentistry Today, say a DSO buyer often requires associate dentists to be under written contracts that can be assigned to a third party, and advise keeping key staff such as office managers and high-producing associates, possibly with bonuses.

What non-compete will a DSO ask you to sign?

Look for one in your employment agreement: the ADA's guide says such a provision in an agreement with a DSO-aligned practice will commonly extend to other practices the DSO has a business services relationship with. Ask for the list of those offices before you agree to a radius.

With the FTC's nationwide non-compete rule set aside by a federal court and removed from the Code of Federal Regulations effective February 12, 2026, state law governs the non-compete in your sale and in your associates' contracts, though the FTC can still challenge an unreasonable one case by case. Three states have changed their rules in ways that touch a DSO sale:

• California. California voids employment non-competes (Business and Professions Code 16600, as amended January 1, 2024), but section 16601 lets a person who sells a business's goodwill, or an owner who sells all of their ownership interest, agree not to run a similar business in the area where the business operated, as long as the buyer carries on a like business there. Whether a covenant in your post-sale employment agreement falls under that exception is a question for California counsel.

  Health and Safety Code 1191, added by SB 351 and effective January 1, 2026, voids clauses in private equity or hedge fund contracts to manage a dental practice or buy its assets that bar a provider from competing after leaving, and expressly preserves “an otherwise enforceable sale of business noncompete agreement.”

• Texas. Under Business and Commerce Code 15.501, a non-compete for a Texas-licensed dentist, entered into or renewed on or after September 1, 2025, is unenforceable unless it meets four limits.

  It must include a buyout of no more than your total annual salary and wages when the contract or employment ends. It must expire within one year after the contract or employment ends. It may cover no more than five miles from where you primarily practiced. And it must be clearly and conspicuously stated in writing. Ask Texas counsel how it applies to each agreement in your deal.

• Colorado. Under SB25-083 (C.R.S. 8-2-113), signed June 3, 2025, the highly compensated worker exception no longer saves a non-compete that restricts the practice of dentistry, and the law limits how long a sale-related non-compete can bind a minority owner who received the stake as equity compensation.

Other states, including Minnesota, are in the state non-compete table in how to sell a dental practice.

How do state ownership rules shape a DSO deal?

Depending on state law, the ADA says, a dental practice may need to be owned by a PC or PLLC that is itself owned by licensed dentists. State rules also limit what a DSO or its investors may control and how a management fee may be set, which shapes the business services agreement your practice signs.

New York bars paying for space, equipment or staff as a percentage of practice income (8 NYCRR 29.1(b)(4)), and North Carolina bars management fees that rise or fall with profits or revenues (21 NCAC 16X .0101(c), effective April 1, 2001). North Carolina's board review ended for arrangements signed, modified or renewed on or after July 7, 2026, but that limit still applies.

If you will keep working in the practice, or part of your price depends on its earnings, ask your own dental transaction attorney, and the DSO's counsel, how its fee and control terms meet your state's rules. The guide to who can own a dental practice sets out what a DSO's management company may control in several states.

Does a DSO deal need a state filing?

In some states, if the deal or the parties pass a size test. These laws require advance notice of health care transactions to a state agency, and several now reach dental practices or the groups and investors that buy them.

• Oregon. Each party's revenue is a three-year average, counted nationwide. The state lists oral health providers, including dentists, among the kinds of entities that may be subject to review, but a deal must also meet those revenue tests.

  Its program has reviewed a DSO-level deal: it approved a private equity recapitalization of Specialty Dental Brands, a DSO serving specialty dentists in 20 states with one Oregon practice, on September 9, 2022, after a 30-day preliminary review.

• New York. The Department of Health has advised that dental practices are health care entities under Public Health Law Article 45-A. Related deals within 12 months count together.
• Washington and Illinois. Both count groups that contract with payers for their providers. Since June 11, 2026, Washington's covers a change of majority ownership or control; Illinois names dental services from January 1, 2027.
• Indiana. The $10 million test counts both sides' total assets, not the price. A sale that leaves the practice majority owned by Indiana-licensed dentists who routinely practice there may fall outside the law.
• Massachusetts. Dentists who actively practice as full or partial owners are not counted as significant equity investors under the amended rules.
• California. Private equity groups, hedge funds and MSOs have had to file since January 1, 2026, but the law's definition of a provider does not name dental practices.

Whether your sale needs a filing is a question for your own attorney and the DSO's counsel. Where one is needed, its notice period has to run before closing, so ask early which states apply and build the days into your timeline.

Who are the large DSOs, and who backs them?

Among them are Heartland Dental, MB2 Dental and PDS Health; the table gives what each company or its investors announced, and when. The ADA Health Policy Institute's 2025 workforce update puts the share of U.S. dentists affiliated with a DSO at 16.1% in 2024, up from 7.2% in 2015.

The Private Equity Stakeholder Project, an advocacy group critical of private equity, counted 149 private equity dental care deals in 2025, and 95% of them were add-on acquisitions by PE-owned platforms; it counts deals, not practices. BizBuySell says larger practices sold on its marketplace in 2025, many of them to private equity firms.

MB2's revenue and operatory target is one DSO's stated preference, not a market threshold for whether a practice can sell to a DSO. Orthodontic, oral surgery and pediatric platforms are covered in the guide to selling a specialty dental practice.

What should you ask before you sign a letter of intent?

Get these answered in writing while you can still walk away, because the ADA calls a sale into a DSO-aligned professional entity generally irrevocable.

• Who buys what. Which entity buys the clinical assets, which buys the non-clinical assets and goodwill, and who owns the professional entity you will work for.
• Cash at closing, in dollars. The amount paid at closing, and every other piece (earn-out, holdback, equity) as its own dollar figure with its own conditions.
• How an earn-out or holdback is measured. Collections, production or EBITDA; before or after the management fee; over what period; and who sets your fee schedule, PPO participation, hygiene schedule and associate hiring while it runs.
• What happens if your employment ends. Whether unpaid earn-out, holdback and equity survive if your employer ends your employment, which the attorneys writing in Pediatric Dentistry Today say the buyer will be able to do.
• The equity. Which company issues it, its class, when and how you can sell it, and how much debt the group carries.
• The non-compete. Its radius and length, and whether it covers every office the DSO supports.
• The management fee. How it is calculated, and how it meets your state's limits on percentage-based fees and on control of clinical decisions.
• Your team and your payer contracts. Which associate contracts must be assignable, and under whose PPO and Delta Dental agreements the practice bills after closing.
• State filings. Which notice laws your attorney and the DSO's counsel think apply, and how they move the closing date.
• Tax. How the price is split among clinical assets, goodwill, the non-compete and your employment, and how each piece, including any equity, is taxed. Ask your CPA before you agree to the split.

Have a dental transaction attorney and your CPA review the letter of intent before you sign it. The dental practice due diligence checklist lists what a DSO will ask for once you do, and how to sell a dental practice covers the whole sequence. To see what your practice could sell for, request a free, confidential valuation. Requesting a valuation does not list your practice, and details about it are not shared with prospective buyers, whether another dentist or a DSO, without your permission.

Sources

All sources accessed October 14, 2026.

1. Dentaltown, Navigating DSO Deals: What Dentists Should Know, November 22, 2025
2. American Dental Association, Business Services Agreements with DSOs: What a Dentist Should Know, January 21, 2021
3. TUSK Practice Sales, TUSK Practice Sales Assesses the State of the Dental Industry in Its Q3 2026 Dental Market Report, July 10, 2026
4. DrBicuspid, 4 key financial considerations when selling to a DSO, June 22, 2024
5. American Academy of Pediatric Dentistry, Pediatric Dentistry Today (Litch and Associates Law Log, by Cheryl H. DeVore, Cheryl A. Cameron and C. Scott Litch), 2026
6. U.S. Small Business Administration, SOP 50 10 8.1, Appendix 15: 7(a) Changes of Ownership, September 25, 2026
7. American Association of Oral and Maxillofacial Surgeons, Evolving OMS market: DSOs and other options (Part 1 of 2), by Joseph W. Gallagher, JD, LLM, Consultant, The Health Care Group, Inc., 2024
8. New York State Education Department, Rules of the Board of Regents, Part 29 (8 NYCRR 29.1(b)(4))
9. North Carolina Office of Administrative Hearings, 21 NCAC 16X .0101 Management Arrangements
10. FOCUS Investment Banking, Maximizing Your Dental Practice Sale: A 2025–2026 Market Guide (whitepaper), March 2026
11. BizBuySell, Dental Practice Business Valuation Multiples & Financial Benchmarks
12. Henry Schein Dental Practice Transitions, Determining Amount of Delta Premier vs Delta PPO Patients (worksheet)
13. American Dental Association, Health Policy Institute (HPI Perspectives), April 2026
14. Mubadala Investment Company, Mubadala Acquires Dental Care Alliance, January 16, 2023
15. ADA News, Is it time to sell your dental practice? December 4, 2024
16. American Dental Association, 5 Years Out? How to Sell Now and Retire Later
17. Federal Trade Commission, Noncompete Rule
18. Federal Trade Commission, Revision of the Negative Option Rule, Withdrawal of the CARS Rule, Removal of the Non-Compete Rule To Conform These Rules to Federal Court Decisions (FR Doc. 2026‑02866), February 12, 2026
19. California Legislative Information (California Business and Professions Code section 16601), January 1, 2007
20. California State Legislature, California Health and Safety Code section 1191 (added by SB 351), October 6, 2025
21. Texas Legislature, Texas Constitution and Statutes (Business and Commerce Code section 15.501), September 1, 2025
22. Colorado General Assembly, SB25‑083 bill summary, June 3, 2025
23. North Carolina General Assembly, Session Law 2026‑41, Current Operations Appropriations Act of 2026, July 7, 2026
24. Oregon State Legislature, ORS Chapter 415, 2025 Edition (ORS 415.500 and 415.501)
25. New York State Department of Health, Public Health Law Article 45-A, Material Transactions Frequently Asked Questions, March 2025
26. Washington State Legislature, Chapter 19.390 RCW, Health care market participants, material changes, 2026
27. Indiana General Assembly, Senate Enrolled Act 9 (2024), adding IC 25‑1-8.5
28. Illinois General Assembly, 740 ILCS 10/7.2a, Notification to the Attorney General
29. Massachusetts Health Policy Commission, Proposed Amended 958 CMR 7.00, HPC Board approved April 16, 2026
30. California Department of Health Care Access and Information, AB 1415 Frequently Asked Questions (FAQ), November 25, 2025
31. Oregon Health Authority, Health Care Market Oversight (HCMO) Program Requirements and Guidance, September 2026, September 1, 2026
32. Oregon Health Authority, Executive Summary: SDB Transaction Review, September 9, 2022
33. Indiana General Assembly, House Enrolled Act 1666 (2025)
34. Heartland Dental, About Us
35. Charlesbank Capital Partners, MB2 Dental Announces Recapitalization Event with New Investor Warburg Pincus, Solidifying Company Growth Milestone, November 12, 2024
36. PDS Health, Appreciating Our 2025 Milestones, February 24, 2026
37. American Dental Association, The U.S. Dentist Workforce - 2025 update (slide 31, 'Dentists' Affiliation to DSOs Continues to Grow')
38. Private Equity Stakeholder Project, Private Equity Healthcare Deals: 2025 in Review, February 11, 2026
39. MB2 Dental, Blog
40. Ontario Teachers' Pension Plan, Heartland Dental and KKR Finalize Majority Interest Deal, April 30, 2018
41. New Mountain Capital, Sonrava Health (portfolio page)
42. Gryphon Investors, Gryphon Investors Acquires Smile Brands, August 18, 2016

Also cited: Kirkland & Ellis, release on Dental Care Alliance's strategic transaction, April 27, 2026.