Southlake, Texas-based Allied OMS plans to use its investment to continue scaling its operations within the oral surgery field, according to Founder and CEO Daniel Hosler.
In June, Allied OMS landed a minority investment led by 65 Equity Partners to expand its service offerings, complete acquisitions and scale operations. The investment marks the first institutional capital raised by Allied OMS, which came about a year after the company closed on a $116 million credit facility to support its growth.
Mr. Hosler recently spoke with Becker’s to discuss how Allied OMS plans to expand its network and support model.
Note: Responses were lightly edited for clarity and length.
Question: How does Allied OMS plan to use this new investment to support its growth this year?
Dan Hosler: We intend on continuing to deeply focus on our core growth drivers, starting with selective partnerships. So, continuing to do more in the way of business development. Second, we also have a number of opportunities to partner with existing practices to open up de novos. If you think of it like a hub and spoke model, we have got some really great hubs out there, and so there’s opportunities to partner with our existing doctors and recruit new young doctors to help us open new de novo clinics.
The third thing is investing in the services we offer to our doctor partners. Our debt recap in May of 2024 allowed us to take the proceeds and further invest in those service lines. We have a number of things we’re working on in terms of smartly utilizing AI tools to provide better access to care to patients when they’re looking for that access. I kind of joke that, in a way, I think AI is going to allow the offices to be open 24/7 and then when it elevates to the level of needing to speak directly with a practice administrator or directly with the doctor, then these tools are going to help provide that. So, there are a number of ways we want to further invest in the service lines to our doctors.
Q: This deal comes a little bit more than a year after the company closed on a $116 million credit facility last year. What message do these two deals send to the dental industry about Allied OMS?
DH: It’s really twofold. To the dentistry industry at large, I think the first message is there’s still a healthy appetite for specialty dentistry services. We are 100% pure play oral and maxillofacial surgery. On top of that, we also provide full scope of care. Many of our young doctors like to know they can come in and do some of the surgeries they were trained to do. It doesn’t just have to be extractions and implants. So, that’s definitely one area that sends a message out there.
This tends to be a pretty recession-resilient business. We deal in acute, episodic care. What I mean by that is, frequently, we don’t do anything that’s more routine. It all tends to be a terminal referral, so you crack a tooth, you have a failed root canal, or you have an accident where maybe you lose teeth or fracture the jaw. Our doctors and surgeons are being called in to provide those services. One of the questions we got asked a lot over the last 12 to 24 months was, how elective is this? And I say, to anybody that’s ever had a cracked tooth, it is not elective. The second it happens, you’re like, “Uh oh. Something doesn’t feel right, and I’m in pain.” I think it’s that immediate ability to resolve a painful issue that makes this a very resilient business model.
Q: What are your priorities for the second half of 2025?
DH: We continue to hold cautious optimism. I think there’s so much going on in the geopolitical arena. There’s a lot going on certainly on the domestic front, with respect to policy creation. We’ve kind of kicked the can down the road a couple of times on these now 10-year-old tax cuts, so I think many of us are looking at this very closely to [ask], how do we make sure we double down on taking great care of patients? As long as we do that, there’s going to be demand. It’s really hard to predict, should we be more aggressive or less aggressive? I think one of the tactics we’re taking right now is, let’s just translate that cautious optimism into doing the things we know we can do well, and that is buying and partnering with practices, opening de novos, and teaching and recruiting young surgeons about why Allied OMS is a great platform to join. As we add more service line extensions, it is going to naturally create a more efficient environment at the practice level. Those are really the four things we’re going to stay focused on this year.
Q: What will DSOs need to finish 2025 strong?
DH: It’s increasingly feeling like a field of capital structure differences. The DSOs that are not over-levered, that have free cash flow to further invest in their businesses, those [DSOs] are doing really well. They’re growing. They’re continuing to add more services to their patients. But if your capital structure or your capital partner is a little bit long in the tooth, your interest rates have gone up, so all you’re using your cash flow for is to just service your debt, it really makes it hard to invest in the business and invest in a great experience for your patients.
One of the things that makes us really excited about our equity partnership and our new debt providers is that they are looking at this as a really great growth opportunity. We are taking a, sometimes I call it a boring approach, which is sticking to our knitting. We’re sort of over-equitized, which means we can be aggressive when we need to be. For those other DSOs out there, anything you can do to try to resolve some of those issues will probably put you back in a position where you can get back to enhancing patient care, enhancing care delivery and helping those doctors and dentists grow.
