Dental Partnership by Specialty
Specialists and IDSOs
While GP practices represent the largest number of IDSO partners by far, the specialists may be the fastest growing and most acquisitive. In the last three years, over 50 specialty only IDSOs have been formed to partner with larger practices of all specialties.
“I had an offer from an IDSO directly which I was about to sign for $19 million. After considering 11 bidders, LPS found me a great partner at $42.5 million with 90% cash.” – Orthodontist, Florida
LPS has achieved values for great ortho practices of over 4x collections on multiple occasions in the last two years in over $200,000,000 of ortho transactions. . Orthodontists have been the most inclined to do deals directly with IDSOs without a bidding contest among multiple prospective partners. In just Q4 of 2021, we got orthodontists about to do direct deals over $25 million dollars more than their initial direct offers once they became LPS clients. Unfortunately, we also know of just three great orthos who did their own deals directly and left at least $10 million dollars on the table.
“It has been a journey to partner up with MB2. I believe I made the right choice and very excited about future and the partnership. I wanted thank everyone from LPS for their hard work and efforts. It has been a pleasure working with LPS . Thank you for the closing gift as well. I am enjoying life right now.” Dr. Stan Cho
There are now at least 15 OMS focused IDSOs. OMS practices are also eagerly sought by Multi-specialty groups nationally and by Dental Trifecta IDSOs as a place to feed referrals from their pedo and ortho practices. The many existing Pedo/Ortho groups are also eager to add OMS to their systems to capture the millions of dollars in collections lost from referring high margin cases to OMS practices not in their group now. LPS has achieved over 11x EBITDA for OMS groups recently in over $250,000,000 of OMS transactions in 2022.
Pediatric Dental Specialists
“When LPS included my Pedo practice in a Dental Trifecta with other LPS clients, the value of my practice increased by over 50%. They earn their fee.” – Dr R.S., Pediatric Specialist
Even smaller pedos have achieved value premiums of up to 80% above the standalone value of their practices in an LPS organized Dental Trifecta. We completed $75,000,000 of pedo transactions in 2022.
“The three Endo-only [IDSOs] that approached me were all eager and made attractive offers (or so I thought). LPS brought in six other bidders. I got 24% more than the high bid I had negotiated by myself. They earned their fee.” – Dr. B.T., Endodontist, Southwest U.S.
The value of Endodontic practices has increased dramatically in the last two years. There are now at least 10 Endo only IDSOs seeking partners across the U.S. LPS has worked with most of them to achieve high initial values and significant equity upside ownership potential. Multi-specialty groups have also increased their interest in Endo practices due to their relatively better performance during COVID.
“I had been approaced by several DSOs interested in partnering with my growing perio practice. I engaged LPS and they achieved 30% more than the highest bid that I had in hand with over eight bidders to choose from. Very glad I used LPS” – Dr A.M., Periodontist in Southeast US
At the start of 2021, there were no perio focused IDSOs. Your only options were the many multispecialty IDSOs. By early 2022, there are now at least four perio focused IDSOs plus six new implant only IDSOs eager for perios with a heavy implant components and the Dental Surgical Trifecta IDSOs who are partnering only with perio, endo and OMS practices in the same region. LPS has completed several transactions with many of these newer groups recently.
Prosthodontists have two IDSO types to consider. The multispecialty groups want to add prostho to support their GP practices in many regions. In addition, the new implant focused IDSOs are very eager for multidoctor prostho practices which focus on implants and implant restoration. It is a changing space.