Oral surgery-focused DSOs and MSOs have continued expanding their footprints across the U.S. as investments in the field grow.
Viper Partners, an advisory and investment firm, announced it is going "all in" on dentistry in 2024 and said it is actively seeking to work with dental practices nationwide. The firm had already put $125 million worth of deals under letters of intent as of Jan. 6.
Viper Partners previously called oral surgery the "next big market," because of the high profitability of practices in the field.
St. Louis-based Oral Surgery Partners, backed by healthcare private equity firm Sheridan Capital, received a credit expansion in January of more than $400 million to invest in the company's infrastructure and complete additional acquisitions.
"This additional capital will enable OSP to accelerate the growth strategy we have executed on over the past few years and is a testament to the quality platform we built," CEO John Cline said. "We have deliberately and successfully partnered with the right surgeon partners, which we believe has enabled us to scale in a mutually beneficial partnership and accelerate clinically-sound growth."
Irving, Texas-based U.S. Oral Surgery Management also gained a $150 million credit expansion from its lenders in August to support future growth.
USOSM CEO Richard Hall said USOSM stands out from other companies because it has enough financial support to continue growth through current economic challenges that could hinder other DSOs' growth.
"Debt availability is very tight and expensive," he said. "I think that's going to limit the growth for those DSOs that don't have availability to that capital. We're in a very strong capital position going into the year and have more than enough dry powder to fund our M&A projections for 2024."
Since receiving the credit expansion, USOSM has expanded in several states, including Virginia, Florida, California, Colorado, Texas, Ohio, Washington, Oregon, Michigan, Mississippi, South Carolina and Arizona. It also added its first practice in Maryland.
Hackensack, N.J.-based Max Surgical Specialty Management has also expanded into several states since its launch last year. The company added its first practices in New York and Vermont earlier this year. It has continued expanding into those states while also adding practices in Pennsylvania.
MSSM co-CEO Jason Auerbach, DDS, told Becker's in September that MSSM planned to double its surgeon network over the next 12 months. He later added that the company is in a strong financial position as it focuses on partnering with more practices this year.
"There's not a lot of debt where we are. A lot of people who did a lot of this work in the years leading up to increased interest rates and tighter debt markets are having a little bit more trouble now because of the fact that there was already existing debt on their books," Dr. Auerbach said. "We're in a very good, very strong position financially to go out and find practices and partner with the ones that make sense for us. Inflation is clearly coming under control and there's talk of interest rate cuts in 2024, and as such, I think we're going to be in a better financial situation than we were in 2023."