A new report shows 69% of DSOs expect to increase their acquisition activity this year, but fewer available practices could put a wrench in those plans.
TUSK Practice Sales, a healthcare M&A advisory firm, released its “Dental Market Report” for the second quarter of 2026 on April 21.
Eight notes from the report:
1. Sixty-nine percent of DSOs surveyed indicated their private equity sponsors expect a moderate or high increase in acquisition activity in 2026.
2. Seventy-eight percent of DSOs anticipate recapitalizations within the next 12 to 36 months.
3. Private placement memorandum exit counts increased by 57.1% last year, which TUSK said has created liquidity that is being redeployed into new acquisition cycles.
4. The DSO field is currently experiencing a high-demand, low-supply environment that TUSK expects to continue for the next nine months. This will lead DSOs to be more selective of their deals, placing more scrutiny on financials, operations and practice performance projections.
5. TUSK reported seeing a wider variation of dental practice valuations during the first and second quarters, with multiple DSOs reaching different valuations for the same practice.
6. TUSK reported that several states have more than 40% of active dentists aged 55 and older, representing one of the largest potential seller pools in the dental M&A market to date. This means the market could soon shift to favor DSOs once those dentists begin the sales process.
7. Development in artificial intelligence technology could help DSOs build more efficient de novo offices compared to acquiring existing practices.
8. DSOs are choosing to walk away from deals over provider risk and clinical continuity issues, including insufficient staffing and over-reliance on a single producer. More DSOs are now requiring a minimum 5-year post-close employment term to close a deal.
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