Although practice acquisitions remain a major growth engine for DSOs, several companies have begun to invest more in de novos for the unique benefits these offices bring.
Smile Partners opened its first de novo office earlier this year as part of a new growth strategy that breaks away from its traditional approach involving practice acquisitions and partnerships. Park Dental Partners also said it plans to use funds raised through its recent initial public offering to support various revenue-building initiatives, including opening de novo offices in existing markets.
Launching new practices is often seen as a way for DSOs to maintain consistency and growth across their brands. Additionally, de novos can be used as a cost-saving strategy for DSOs that want to continue expanding their network in a tough macroeconomic environment.
“De novo growth, when successful, is a tremendous use of capital,” Phase 1 Equity CEO Mike Rice told Becker’s. “In today’s environment, everybody’s holding onto their checkbooks a little bit tighter compared to say, 2021. You use a lot less capital up front in opening up a location versus buying an existing, highly profitable practice. With that said, each of them has their own unique risks.”
De novos can also help DSOs build their presence in a new market and lead to partnerships with existing practices later on.
“The key to successfully entering a new market, especially with de novos, is establishing your brand as quickly as possible,” Jim Mizouni, Sage Dental’s senior vice president of portfolio development, told Becker’s. “This involves recruiting outstanding team members, as well as clearly articulating your brand differentiation to potential patients through both paid and non-paid marketing channels.”
PDS Health continues to stick to its long-term growth strategy involving de novos, with plans to open more than 100 practices in 2026. Dan Burke, PDS Health’s chief enterprise strategy officer and general counsel, told Becker’s that the de novo strategy pairs perfectly with the company’s technology investments and other initiatives.
“With acquisitions, you’re inheriting systems and technology you may not need. You’re taking on processes that likely don’t align with your platform. And you’re trying to integrate people who may not come from the same culture,” he said. “Those are hurdles. Not necessarily insurmountable ones, but hurdles all the same. With de novos, we get to start strong and scale with intention. This is not to say that we won’t one day consider an acquisition, but the strengths of a de novo model are compelling.”
At the Becker's 5th Annual Future of Dentistry Roundtable, taking place September 14-15 in Chicago, dental leaders and executives will gain insights into emerging technologies, practice growth strategies and the evolving landscape of dental care delivery, with a focus on innovation, patient experience and operational excellence. Apply for complimentary registration now.
