DSOs vs Independent Buyers — Picking Your Lane
I get this question almost every week from a dental owner thinking about selling.
"Should I sell to a DSO or to an individual?"
Here's the honest answer most advisors won't give you: it depends entirely on what YOU want from the rest of your life. There's no right answer, only right tradeoffs.
So let's stop dancing around and actually look at the two lanes.
1. The DSO / Group Buyer Lane
When I say DSO, I'm being a little sloppy. There's a real spread under that umbrella — pure DSOs (one brand, one set of operations, one bench), private equity-backed groups in roll-up mode, MSOs, and big regional groups that look corporate but feel different.
What they have in common:
They have committed capital. They can move quickly when they want to.
They underwrite EBITDA. They want to see at least $400K-$600K of adjusted EBITDA before they get serious. Below that, you're not really in the conversation.
They will pay multiples that often look attractive on the headline number.
They expect you to roll equity. Maybe 20%. Maybe 30%. Maybe more. That equity is your "second bite at the apple" — and yes, sometimes that bite is real money. Sometimes it isn't.
They will want you to stay on. Three years is the typical ask. Sometimes five. They want the doctor and the relationships to stick.
They will run their own back office. Your office manager's role will change. Your bookkeeper's relationship with you ends. Your decisions about staffing, scheduling, supplies, and pricing become recommendations, not mandates.
Action Items / Food for Thought:
Are you genuinely OK working for someone else for 3-5 years after the sale?
Do you trust the management team of the buyer you're talking to? You're going to see them more than you saw your last associate
Do you understand what your equity rollover is actually worth — not what they tell you it's worth?
2. The Independent Buyer Lane
This is the traditional dentist-to-dentist sale. It's been the backbone of dental transitions for decades and it's not going anywhere.
What it looks like:
The buyer is one or two doctors, probably with an SBA loan, probably advised by their CPA and a transition consultant
The deal closes in cash (usually) — sometimes with a small seller note, but most of the dollars are wire-transferred at closing
Multiples are typically lower than DSO multiples on the headline number, BUT…
…there's no equity rollover, no second bite — what's at the closing table is what you get
You usually stay 6-12 months for transition, sometimes longer if the buyer wants associate coverage, but you're not signed up for a 5-year stint
The buyer takes over completely. The practice changes — their way, not yours
Your team works for the new owner. Your patients see a different name on the door
Action Items / Food for Thought:
Do you want a clean break or a long handoff?
Are you OK with the practice being run differently after you leave?
Is your EBITDA too small to attract a DSO? An independent buyer doesn't care about EBITDA in the same way — they care about take-home pay (SDE)
3. The Multiple Question
Headline multiples mislead. I want to be very clear about this.
A DSO might offer you a 6-7x EBITDA multiple. That sounds great until you realize:
25-30% is rolled equity, not cash
5-10% might be earnout based on post-close performance (which they will help define down)
"EBITDA" in their offer letter and EBITDA on your accountant's books may be two different numbers after their adjustments
An independent buyer might offer you what looks like a lower multiple, but it's:
100% cash at closing (or 90% with a small note)
Defined off SDE if it's a single-provider practice — and SDE for solo docs is almost always higher than EBITDA, so the dollar number can be remarkably similar
Done in 4-6 months instead of 9-12
You can't compare offers without normalizing them. Headline multiple is a marketing number. What ends up in your bank account is the real number.
Action Items / Food for Thought:
Insist on seeing total cash-at-close, equity rollover terms, earnout terms, and ALL deal expenses laid out side by side
If the buyer's offer letter is vague about working capital, transaction expenses, or earnout mechanics — that's a tell
Run the comparison NOT in multiples, but in dollars: "If everything goes as expected, here's what I net. If everything goes badly, here's what I net."
4. The Lifestyle Question (This Is the Real One)
Here's the thing nobody puts in a textbook.
Selling your practice isn't a financial decision. It's a life decision, with financial consequences.
DSO/group sale: you keep practicing, you take some chips off the table, you get to focus on dentistry instead of HR and AR aging — but you're now an employee in a place that used to be yours. For some doctors, that's a relief. For others, it's a slow grind.
Independent sale: you walk away (or walk into something new) on your own timeline. You take the cash. You probably make less than the DSO offer in absolute dollars — but you also stop having someone else decide which composite you stock.
I have seen DSO sellers two years in regret it. I have seen independent sellers six months in regret retiring. There's no clean answer.
What there IS: an honest conversation about what you actually want the next five years to look like.
Action Items / Food for Thought:
Picture yourself 18 months after the sale in BOTH scenarios. Which one feels right?
Talk to a doctor who sold to a DSO and is 2+ years in. Don't take the buyer's reference list — find your own
Talk to a doctor who sold to an individual and is 1+ year in. Same advice
Be honest with yourself about whether you can really work for someone else
5. When the Lane Picks Itself
For some practices, the choice isn't actually a choice.
If your practice does $400K of adjusted EBITDA or less, you're probably going to be selling to an independent buyer. DSOs aren't structured to underwrite practices that small. That's not an insult. It's just the math of their fund return profile.
If your practice does $1.5M+ of adjusted EBITDA, you're almost certainly selling to a DSO or group — independent buyers usually can't get the financing to compete at that level, and the market puts a real premium on size.
The interesting conversation happens between $500K and $1.2M of adjusted EBITDA. There, you're genuinely choosing between lanes. And THAT is where you need to think hardest about what you actually want.
Action Items / Food for Thought:
Get a real EBITDA number from someone who knows dental — not a generic CPA, not a back-of-envelope. The number matters because it determines which lane you're even in
If you're in the middle band, get offers from both kinds of buyers. Don't pre-commit. The data tells the story
Final Thought
A DSO and an independent buyer are not the same product. They're not even substitutes. They're different financial instruments wrapped around the same practice.
The right buyer for your practice depends on what you want from the next chapter — not on which buyer's marketing brochure looks shinier. Pick the lane that fits your life. The dollars will follow.
If you don't know which lane fits, that's a conversation. We have it for free, and there's no obligation to do anything afterward.
Just don't pick a lane because someone else is rushing you. The decision deserves more than that.
Thank you for your interest in Wicklow!
Our team understands how to help you find the right opportunity that fits your specific needs, and we’re committed to helping you succeed. Should you have any questions, fill out the form below with your details, and we'll get back to you as soon as possible. Your information is secure and will only be used to assist you.
