DSOs and dental groups are becoming more selective in the practices they choose to partner with, according to a report from healthcare M&A advisory firm TUSK Practice Sales.
The company’s “Dental M&A Market Report” for the third quarter of 2026 analyzes buyer behavior, valuation trends, deal structure and dental practice transitions.
Here are nine things to know from the report:
- DSOs that are looking to buy are scrutinizing practices’ financials, operations and projections more intensely, as the supply of “premium” practices is tight.
- The top reasons why DSOs are walking away from deals include provider risk and clinical continuity, declining financial performance and reimbursement exposure.
- The federal funds rate has held at 3.50% to 3.75% through 2026, with the Federal Reserve pushing anticipated cuts into 2027 and 2028. That elevated cost of capital continues to shape how aggressively buyers value deals and structure their offers.
- Even with a higher cost of capital, there is still fresh equity and new lending agreements to drive DSO activity.
- With more DSOs nearing recapitalization events, groups are seeking out high-performing practices to demonstrate continued growth going into a potential sale.
- About 35% of the dental industry is consolidated, with the five largest groups supporting more than 5,600 practices in total.
- Dentistry has still been one of the more active segments in healthcare in terms of transactions, with about 128 transactions through the first five months of 2026.
- Practice-level multiples have held steady around 5x to 9x in the past two years, providing a steady planning baseline.
- DSO offers typically lead with 60% to 80% of a deal’s value as cash at closing, with the remainder rolled into joint venture or holding company equity.
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