Increased practice profitability and more favorable economic conditions predicted by experts is leading many investors to be optimistic about M&A activity for dentistry.
Barry Lyon, DDS, dental director for Main Street Children’s Dentistry and Orthodontics and Dental Care Alliance, recently spoke with Becker’s to discuss what could be in store for dental practices and DSOs in 2026.
Editor’s note: This Q&A is part of a weekly series featuring Dr. Lyon focused on topics in the dental industry and DSO field. The views expressed are those of Dr. Lyon and do not necessarily reflect those of Main Street Children’s Dentistry and Orthodontics or Dental Care Alliance.
This response was lightly edited for clarity and length.
Dr. Barry Lyon:
A few years ago, there was robust M&A activity with DSOs actively seeking out dentists looking to affiliate. Much of this was spurred on by the pandemic, with many older dentists, who were already considering transitioning out of their practices, wondering how they could recover to pre-pandemic levels. Both single and multi-location practices were highly sought after.
This activity slowed down dramatically in 2023 due to high interest rates, unrealistic seller expectations, a cautious economic climate and buyers being forced to use more equity or alternative financing methods.
Today, however, the expectation is there will be a rebound. Many investors believe 2026 will have the highest level of M&A activity since 2022 based primarily on 60% of practices reported to have higher top-line revenue in 2024.
Because dental practices have embraced artificial intelligence, new technologies and increased operational efficiency by utilizing cloud services, offices have increased profitability and can benefit from higher EBITDA multiples than in the past.
Investors are bullish, and for good reason. They recognize there’s an aging population that requires continued maintenance, periodontal therapy and implants. The post-pandemic response has dentists hiring hygienists, associate dentists and dental assistants to meet the demand. Office infrastructure is being upgraded and the newest technologies are being adopted. Timing all of this with recapitalization cycles and the anticipated lower interest rates, one can see how a renewed M&A cycle is reignited.
