What is the average EBITDA multiple for dental practices?
An EBITDA multiple is the ratio of enterprise value to earnings before interest, taxes, depreciation, and amortization, used to value a practice for sale.
Quick answer
Dental practices typically sell for 5x to 8x EBITDA for single-location and add-on acquisitions, and 8x to 11x EBITDA for multi-location DSO platforms, depending on growth, payer mix, and provider retention.
The detail
Dental practice multiples have a wide range driven by buyer type and scale. Single-location and add-on DSO acquisitions typically transact at 5x to 8x normalized EBITDA. DSO platform acquisitions of multi-location groups with $2M+ in EBITDA pay 8x to 11x. Specialty practices (orthodontics, oral surgery, pediatric dentistry) trade at higher multiples than general dentistry, often at the upper end of the add-on band for single locations because of higher margins and procedure mix. Implant-heavy practices and those with strong hygiene production also command premiums.
DSO consolidation continues at pace, with PE-backed dental platforms accounting for the majority of >$5M EBITDA transactions per Pitchbook.
ADA Health Policy Institute tracks practice ownership trends and reports DSO affiliation continues to grow each year.
Source: ADA Health Policy Institute
Single-location and add-on DSO acquisitions typically trade at 5x to 8x normalized EBITDA; multi-location platforms trade at 8x to 11x.
Source: ADA Practice Transitions
What this means for clinic owners
From Sorso
The single biggest driver of your dental practice multiple is whether you have one location or three. Going from 1 to 3 locations typically doubles your multiple and triples your EBITDA, which is why platform creation is the fastest path to a $5M+ exit.
Related questions
How do PE firms value medical practices?
Private equity firms value medical practices primarily on a multiple of trailing twelve-month adjusted EBITDA, typically 5x to 12x, with the multiple driven by scale, growth, payer mix, and provider retention.
What is the difference between platform and add-on multiples?
Platform acquisitions trade at 8x to 14x EBITDA because the buyer pays for scale, infrastructure, and management, while add-on acquisitions trade at 4x to 7x EBITDA because they bolt onto an existing platform.
How much will a DSO pay for my dental practice?
DSOs typically pay 5x to 8x EBITDA for single-location and add-on dental acquisitions, and 8x to 11x EBITDA for multi-location platforms with $1M+ in EBITDA, with consideration split between cash, rollover equity, and earnouts.
What are EBITDA add-backs in practice valuation?
EBITDA add-backs are non-recurring or owner-related expenses added back to reported EBITDA to show normalized earnings, typically increasing reported EBITDA by 10 to 30 percent in owner-operated practices.
Founder of Sorso. 19 years in corporate finance. Managed a $450M loan portfolio before building a fractional CFO firm exclusively for healthcare clinics.
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