In 2023 many LPS clients including GP and all specialties achieved record value IDSO partnerships after considering a record number of qualified bidders. Our record for the year was a $43 million partnership at 14+x EBITDA. A miracle not to be repeated in 2024, I am afraid. The highest value transaction for 2022 was $62.5 million.

Multiple LPS clients nationally achieved 10x EBITDA or higher values from great IDSO partners. The volume of LPS completed IDSO partnerships in 2023 was slightly below 2022, but the average partnership value was UP. LPS completed transactions in 2022 and 2023 exceeding $1.0 billion. Fortunately, in 2023, global investors continued to invest billions in U.S. IDSOs with an
exciting new entry from ESG funds.

Several eager bidders from 2022 reduced their new partnership activity or stopped completely in 2023 due to capital, credit or a focus on improving their integration process and growing organically. Fortunately, these groups were replaced in 2023 by new IDSOs and recapitalized legacy IDSOs.

LPS delivered six or more qualified bidders for most clients and some had ten+. The record was set for a FL OMS practice
with 18 bidders. Multiple bidders created record values, but more importantly, gave doctors more choices to select the
right IDSO partner. IDSO quality is a bigger issue than ever in 2024. Some will fail; fortunately, none of the IDSOs LPS has partnered clients with over the last seven years will!

Big Dental Partnership Trends from 2023

Young Dentists: LPS again completed multiple transactions for doctors in their 30’s. The average age was near 50.

Older Dentists: Single doctor practices with 60+ aged doctors are becoming more challenging. IDSOs prefer long-term partnerships with doctors who have a decade or more left in their career.

IDSOs Getting Paid More: The IDSO’s ability to achieve higher payer reimbursement rates than independent practices are growing rapidly. We saw some examples of 20%+ higher in 2023.

Equity Gains: A Dental Trifecta IDSO which LPS helped grow recapitalized at the end of 2023. Our clients more than doubled their equity value in less than 30 months. Several more in process will be completed in Q1 2024; a coming big win for dozens of LPS clients. Recap multiples are under pressure for lower quality IDSOs with nominal organic growth rates.

Global IDSO Investment: An investor with 2022 vintage investments in US IDSOs invested in another US IDSO via one of its ESG funds in 2023. ESG funds have $17 trillion to invest. The target IDSO was Medicaid focused. Good news for future values of pedo, ortho and OMS practices, with or without government payers.

AI Adoption: About to become critical. Many IDSOs are rapidly helping their partner practices implement AI technologies. Actual production increases in restorative care are in the 15%+ range and 20%+ in periodontal care. AI is no longer science fiction, but rather a patient care improvement tool which creates double digit practice collections growth. Ultimately every GP practice will have to adopt AI to compete and provide the new standard of patient care.

Growth Rate Matters: Several IDSOs reported 8%+ average practice collections growth rates across all of their partnerships. One of the largest IDSOs achieved a 5%+ EBITDA growth on average across their hundreds of practices. Shrinking independent practices have a challenge.

Doctor to Doctor Exits: While LPS does not handle doctor to doctor transitions, higher interest rates and the growing number of new doctors who are joining DSOs and IDSOs vs. purchasing a practice is limiting doctor’s exit options and reducing values.

Interest Impact: Some ALL-on-X focused practices saw reduced case starts in 2023 due to the cost of patient financing for high value procedures. Multiple IDSOs bids were limited by higher interest rates. However, higher interest rates enabled doctors with millions in cash from an IDSO partnership to achieve 5%+ risk free yields.

Invisalign: Invested $75 million in Heartland. Perhaps better than their investment in Smile Direct Club? And I will bet the 1700 Heartland practices are paying less than you are…

Dental Practice Values and Commentary by Practice Type

Size, Growth Rate and Doctors Under 60 were key factors in determining record values.

General Practice Dental Valuations

New record values for growing GP practices in desirable geographies were achieved with a high mark of 10.6x EBITDA for LPS GP clients. Average practices generally all achieved 7x+.

Pedodontics Dental Practice Values

The big winners of 2023! Multiple partnerships at 10x for larger practices, due to a rapidly growing class of Dental Trifecta IDSOs. Thirteen qualified bidders were the record for a pedo in FL in 2023. Medicaid practice values increased.

Periodontist Dental Practice Value

A new record value of 10x+ set in a growing area, but NOT in FL, TN, TX, AZ, CO, ID or UT, the normally “hot” states. New implant focused IDSOs bidding against the multi-specialty IDSOs drove up bidders and values nationally.

Oral and Maxillofacial Surgeon Valuation

Acute recruiting challenges created a record number of IDSO partnerships in 2023, as it’s near impossible to recruit OMS grads out of residency. There are now 17 OMS Only IDSOs competing against 10 Dental Trifecta IDSOs and dozens of multi-specialty groups. With so many IDSO partners seeking new opportunities, OMS have a dozen or more qualified partner options. High value achieved in 2023 was 11x+. OMS is the fastest consolidating of all practice types.

Orthodontist Practice Valuations

The ADA reported that ortho is the most consolidated specialty. 18% of all orthodontists either work for a DSO or are partnered with an IDSO. LPS created multiple partnerships from coast to coast with several at 10x+ EBITDA values. Case starts in 2023 dropped again, but not as sharply as in 2022. Several of the 14 ortho only IDSOs are having challenges and are on the LPS “Backlist”; (Unqualified Bidders to Avoid). Dental Trifecta IDSOs filled the void.

Endodontist Practice Values

Endos Just barely hit high record values, with fewer transactions. Fewer great IDSO partner options in 2023 vs. 2022. But 9x is still possible in the right areas.

Implant and All-on-X Dental Practice Valuation

Multiple new IDSOs with experienced capital are eager for implant focused practices nationally. The winner of this year’s 14.6x EBITDA crown was a multi-specialty and ALL-on-X practice in the Midwest with a young, single doctor owner and 20% growth in 2023.

The Biggest Reasons why Dentists Chose an IDSO Partnership in 2023

  • Reduced administrative burdens are very attractive to younger docs seeking more family time.
  • Liquidity now yields 5.0%+ risk free. It’s a great time to lock into “safe” investments to secure your nest egg.
  • Zero debt is attractive. Commercial and consumer lending rates are rising across the board. Loans that will term out in the near future are about to get much more expensive than they were 5 years ago. Pay them off now, if you can.
  • The Power of Scale. IDSOs have been successful negotiating lower cost of supplies, higher reimbursement rates, recruiting the best new talent, and have developed sophisticated marketing campaigns. IDSO partnerships offer numerous ways to positively impact your bottom line.
  • Security for your loved ones. Two LPS client doctors died in 2023 while we were in process of their $5.0 million value transactions. You can imagine the impact this had on the value of these practices, and how it affected their families.
  • Concerns of practice values peaking. The market is full of IDSO partners seeking to grow their footprint. As they enter markets and their cost of capital increases, their hunger will satiate to some degree. Good times don’t last forever, and right now is a very good time.
  • Margin compression from competition and inflation. The big boys are using AI, you are probably not. Tech is sexy and provides superior patient care.

Forecast for 2024

  • Values are peaking! I don’t see large declines in the near future, but record valuations are going to be more difficult to achieve.
  • Recruiting challenges are not going away. IDSOs are hiring new doctors before graduation and offering very valuable considerations to hire the cream of the crop. Can you do the same?
  • Geopolitical risk is growing. Expect more Washington DC nonsense as we are entering an election year.
  • More doctors will choose IDSO partnerships to diversify their investments and gain big partner support.
  • LPS now buying practice real estate. Sometimes those offices are a sticking point during partner negotiations. We see a lot of value in IDSO occupied real estate, and we can help the new partnership between you and an IDSO get started by removing this potential complication.


Many of LPS’ multiple 10x+ transactions in 2023 were partnerships with newer IDSOs which in theory have a higher risk/higher reward profile that are “under the radar”. Choose the IDSO investor wisely and we think risk is mitigated and upside is magnified. Not quite to the 500% gains some LPS clients achieved in 2022 in less than three years, but not far off in some cases. Highest value practices are those in attractive geographies with growing populations, but not always. High value practices have growing collections, increasing EBITDA and a doctor with a personality and a growth plan.

Chip Fichtner