Private equity firms bite deeper into DSO field

Five new private equity-backed dental support groups have emerged in the last few months, showing the large presence and growing interest private equity companies have in the field. 

Private equity deals have been plentiful, with several taking place in 2021 and this year. In addition to investments and acquisitions of private practices and dental companies, firms have been steadily launching DSOs nationwide. 

Private equity firm Shore Capital Partners kicked off February with the launch of OMS360, an oral surgery support organization with affiliations in Kentucky, Alabama and Georgia.

Oral surgery is particularly of interest to private equity firms, according to Viper Equity Partners. The investment and advisory firm said it is seeing "top dollar" deals that leave oral surgeons in charge of their practices while becoming shareholders and being paid 35 to 45 percent of their personal production after a deal closes. 

In March, private equity firm Thurston Group formed a DSO by merging three dental groups based in the Southeast region: Dental Partners of Southwest Georgia, Garner Dental Group and South Georgia Dental Management. SGA Dental Partners is dentist-owned and led with 60 practices under its belt. 

Thurston Group also formed Gen4 Dental Partners in August 2021, consisting of five group practices at 15 locations across Arizona and Utah. The firm hailed the DSO as the "newest generation of DSO," that is clinician-centric and patient-focused. 

At the time of the DSO's announcement, Thurston Group said Gen4 would execute an aggressive acquisition plan.

"Thurston will help to expand the company's geographic footprint and deliver support and economic value to our doctor partners as we have historically and serially accomplished in all of our past dental investments," said Patrick Haynes, founder and chairman of Thurston Group.

Most recently, Eau Claire​, Wis.-based Simko Specialty Dental and private equity firm Blue Sea Capital partnered to create Specialty Smile Partners. The new organization will provide administrative support to Simko's affiliated practices and guide the company through its continued growth.

With DSOs having such a large presence in the dental industry, private equity groups are expected to continue showing their interest in the field this year.

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