What's My Dental Practice Worth in 2026?

The dental industry has seen massive M&A activity over the past decade, driven by Dental Service Organizations (DSOs) rolling up practices across the country. If you own a dental practice, you've probably received unsolicited offers or heard about colleagues selling to platforms.

So what's your practice actually worth? It depends on size, structure, and who's buying.

The Basic Valuation Framework

Solo and small practices (1-2 dentists) typically sell for 2.5x to 3.5x SDE (Seller's Discretionary Earnings). SDE is your net income plus your salary plus any add-backs for personal expenses or one-time costs.

Larger practices and groups (3+ dentists, $1M+ EBITDA) can attract DSO buyers paying 5x to 8x EBITDA, sometimes higher for exceptional practices.

The gap between these ranges is significant — and it's all about what kind of buyer you're selling to.

Individual Buyers vs. DSOs

Individual buyers (dentists buying their first practice) typically use SBA loans. They're capped at what the practice's cash flow can support, plus their down payment. This puts a ceiling on price.

DSO buyers are building platforms. They pay premium multiples because they're buying growth, operational leverage, and market share. They have different economics than an individual dentist.

The catch: DSOs mostly want practices that are already scaled. Single-provider practices with under $1M in revenue usually don't fit their model.

What Drives Higher Multiples

Associate leverage: Practices where associates generate significant production (not just the owner) are worth more. If you're doing 80% of the work yourself, that's a problem.

Hygiene revenue: Strong hygiene programs create recurring revenue and free up doctor time for higher-value procedures.

Facility and equipment: Modern equipment and a well-maintained facility reduce buyer concerns about near-term capital expenditure.

Payer mix: Practices with strong PPO and fee-for-service revenue are preferred over Medicaid-heavy practices.

Location: High-income areas with good demographics command premiums.

Growth trajectory: Growing practices are worth more than flat or declining ones, even at the same revenue level.

What Kills Your Valuation

Owner dependence: If patients come specifically for you, they may not stay when you leave. Buyers discount heavily for this risk.

Aging patient base: A practice full of elderly patients without a strategy for new patient acquisition is a declining asset.

Deferred maintenance: Outdated equipment or facility issues become negotiating points that reduce your price.

Lease problems: Short remaining lease term or unfavorable renewal options create risk.

Staff issues: High turnover or key employees planning to leave create transition risk.

Associate non-competes: If you have associates without non-competes, they could leave and take patients with them.

The DSO Calculation

If you're large enough to attract DSO interest, here's how they typically think:

1. They look at EBITDA (not SDE, since they'll install professional management)
2. They apply a multiple based on size, market, and specialty mix
3. They structure the deal with cash at close plus rollover equity and/or earnouts

A typical DSO deal might be:

• 70% cash at close
• 20% rollover equity (you keep ownership in the platform)
• 10% earnout based on performance

The rollover equity is where it gets interesting. If the DSO grows and sells to an even larger platform, your rolled equity could double or triple. It's called the "second bite of the apple."

Current Market Dynamics (2026)

The DSO market has matured. The days of paying 10x+ EBITDA for average practices are mostly over. Multiples have normalized as the industry has consolidated.

That said, there's still strong demand for:

• Multi-location groups
• Specialty practices (ortho, oral surgery, perio)
• Practices in growing markets
• Associate-driven practices with scale potential

For smaller practices, the market remains steady. Individual buyers are active, often using SBA financing. These deals are less competitive but more predictable.

Preparing Your Practice for Sale

If you're thinking about selling in the next 1-3 years:

Grow your associate production: Every dollar of associate production is worth more than owner production.

Build your hygiene program: Recurring hygiene revenue is highly valued.

Document your systems: Make the practice teachable and transferable.

Lock in your lease: Negotiate favorable terms before going to market.

Clean up your books: Work with a dental CPA to ensure your financials tell the right story.

What To Do Now

Start with a realistic assessment of your situation:

• What's your annual collections?
• What percentage comes from your production vs. associates/hygiene?
• How's your payer mix?
• What's your lease situation?
• Are you growing, flat, or declining?

These factors determine your buyer universe and likely valuation range.

If you want to talk through your specific situation, schedule a call. I help dental practice owners understand their options and maximize their exit value.