Recent economic events have led to a slight decline in practice values, both in sales to DSOs and traditional buyers. Below, practice transition experts Jonathan Martin, CPA and Wade Coleman, JD* discuss the latest practice valuation trends, particularly those involving DSOs, so you can make the best decision possible in this critical area.

DSO Sales – 2022 In Review

Fueled by near record-low interest rates and excellent 2021 stock market returns, 2022 started off with a bang. In this favorable environment, DSOs were increasing their purchase price offers. For example, practices that were selling for 7x EBITDA in 2021 were selling for 8x EBITDA in early 2022.

Midway through 2022, several factors combined to create a modest “market correction,” causing practice values to decrease slightly. The growth in dental demand slowed as the post-COVID, pent-up demand was satisfied and patients were pinched by higher inflation. Meanwhile, overhead costs