5 dentists' thoughts on private equity

Private equity's presence can be felt throughout the dental industry. Here's what five dentists are saying about it:

Note: Responses have been lightly edited for clarity and length.

Barouir Deirmenjian, DDS. Smiles West (Mission Hills, Calif.): Consolidation is continuing with private equity groups and strategic groups being more conservative and cautious on the dental assets available.

Louis Cooper, DDS. Greenwich (Conn.) Hospital: With the increasing activity of DSOs and private equity, dentists face a decision as to whether the advantages of entertaining joining this new wave outweigh giving up their independence.

Michael Davis, DMD. Smiles of Santa Fe (N.M.): These last five years will be viewed as the "good old days" of private equity extracting money from the dental industry. Practices were sold for outrageous amounts. DSOs were rolled over once, twice or even three times to the latest private equity firm to hold the DSO in their portfolio. Those days of wild expansion are dramatically tapering off. Much more planning is involved today with de novo startups and practice purchases. Many dentists who sold their practices to DSOs will never see the promised back-end payment.

Robert Klaus. President of Unique Dental Scheduling (Jefferson, Ind.): The trends I think we are paying attention to would be shifts in growth postures. In the first half of last year, we had the sense it was pedal to the metal for growth by most private equity-owned entities. That seemed to shift quite a bit towards the end of the year; our assumption is that the cost of capital to acquire changed, and thus could have a meaningful impact moving forward to slow the growth rate of acquisition for those types of entities.

Eric Mintalar, DDS. Mintalar Family Dental (Minneapolis): The emergence of DSOs have become an attractive option for young dentists, and I believe the DSOs and private equity groups are here to stay and will exponentially grow as the market pivots to a managed group practice. There is legitimacy to more leveraging power with groups toward insurances, supplies, labs, staffing and salaries. 

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