Irving, Texas-based Specialized Dental Partners plans to focus on strategic partnerships and supporting integrated care among its clinicians as it adapts to increased demand for specialty services.
The DSO added more than 20 offices and 80 doctors to its network in 2025, bringing its network to more than 275 offices and more than 450 doctors in 36 states. The organization has also worked on integrating its specialty services to streamline care and reduce delays for patients.
Specialized Dental Partners CEO Scotte Hudsmith recently spoke with Becker’s to discuss his company’s growth and goals for this year.
Editor’s note: These responses were lightly edited for clarity and length.
Question: How has Specialized Dental Partners’ growth model evolved recently?
Scotte Hudsmith: We continue to do affiliations, not at as fast of a pace as prior year because of a little shift in strategy we have, and in that shift is expanding our integrated care footprint. A lot of the existing endodontic practices we have, we’ve shifted some of the dollars to where we’re expanding operatories there, and we’re converting them to integrated care models so that we have endodontics, periodontics and oral surgery all under the same roof and the specialists practicing together in a coordinated way to make sure the patient has a phenomenal experience and a great outcome. [It ensures] we serve our referring doctors as well as patients that come to us directly in a much better way. It creates a greater level of access to care too. So, we’re still doing affiliations. We just have a combination model where we’re doing what I call quasi de novos, which is the expansion of these existing locations, and then also going out and adding more practices so that we can continue to take those and expand them further as well.
Q: Are there any specific accomplishments you are most proud of?
SH: It’s really just our team overall. It’s kind of a wild market out there, a lot of groups that were struggling a bit, and the fact that we were able to continue to grow — we’re not a highly levered business and we generate free cash flow to pay for a lot of this expansion. That’s really attributed to our team and doing the right thing, just making sure we’re supporting the doctors so they can take care of the patients the right way, and everybody focusing on what they’re really good at.
Q: Many DSO executives predicted in early 2025 that M&A activity would pick up a lot more than it actually did. Did the economy and M&A activity pan out the way you predicted it would?
SH: For us, they did. We’re a slightly different model than some of the other groups that are out there. The majority of the patients who come to us need our services because we’re a little bit more of the emergency side of the equation. They’re in pain, they need a root canal, and we’re there to get them out of pain. So, we’re slightly different in that sense. I happen to be president of the [Association of DSOs] this year. I get to talk to many [executives,] and that really does seem to be what the largest impact was, from an economic standpoint, some people pulling back.
Toward the end of the year, there was an acceleration. Many of the groups had a really good last quarter of the year, and I’ve talked to several who are having a great January so far. I think there’s a little more calmness [about] the economy. Interest rate cuts certainly have helped. Some of the fear around tariffs and what the impact was going to be has calmed down. So, I think we’re returning a bit to normalization where at a period of time, I think people maybe pulled back for a little bit and came out a bit stronger.
Q: What else can we expect to see from Specialized Dental Partners this year in terms of inorganic and organic growth?
SH: I would expect high, single-digit, low double-digit organic growth. We’ve been that way for a long period of time. The other good news for us is there are more patients, especially as boomers age, who need root canals and the services we offer on the perio and oral surgery side as well. We have a tremendous amount of demand for our services that are out there.
On affiliation growth, I think we’re seeing a little bit of a pickup, more people wanting us to to engage. We’re still living at a very measured pace and making sure we’re doing the right things and maintaining the right multiples and that it’s a good fit most importantly. We don’t want people who just want out because they’re afraid. We want to make sure they want to be part of what we’re doing for the long run, and growing the business significantly, that they understand the shift toward an integrated specialty care model, and that they want to be part of that. So, I think we’ll see some pickup. I don’t know if we’ll return to where there are a whole bunch of deals every single month. We’re a little more selective, and I think the folks that want to affiliate are a little more selective right now with what’s going on.
The reality is some of the sellers are afraid. I mean, there were groups that were out there that were the EBITDA stackers that just took them and slapped them together and didn’t really have the infrastructure and a long-term vision. We’re not one of those. So we’ve seen a flight to quality for folks that may have been thinking about doing that and attracted by the higher multiple. We’ve never been the highest multiple offer. We’ve always said we’re in this for the long run. If you think of the tortoise and the hare, we’re the tortoise. Even though we’re a pretty fast tortoise, we’re the tortoise. I think that’s a good thing for people, and I think that’s who’s showing up and who we’re actively engaged with and talking to about joining us.
Q: What will DSOs need to be successful this year?
SH: All of us have had to get lean and really focus on what we can do to improve efficiency, and AI certainly brings a lot of promise in that area. I think we’re all hopeful about AI. I also think we have to take a very practical approach to it. We can’t just go explore every toy. There are a lot of amazing, great point solutions out there. Many of them are just wrappers around the other language models, and they’re leveraging it so they may have a workflow or user interface, but it’s really something else in the back end. Picking the right ones and understanding what’s really going to add value and how we bring it in is going to be critical for all the DSOs, regardless of whether you’re a general dentistry DSO, a specialty or multispecialty practice, you’ve really got to pick well.
At the same time, we can’t forget we’re in the people business, so we need to use AI to take away those mundane tasks and things that can be administratively done by a machine, and get the people back talking to the patients and referring doctors and the other specialists that we all work with across the organizations, and just make sure we have people talking to people and machines doing tasks that add no value. I think if we can really do that, it’s going to be fantastic. I think this is kind of a test year for that, where we’re going to see a lot of that technology get rolled out. We’re going to make some mistakes. We’re far from perfect, and there are going to be things we think that technology is going to do that it’s not going to do. So, getting through this to where we can really see the benefit in the next two, three and five years is going to be extremely important. If anybody is not looking at leveraging technology and the things that are available to do that, they’re probably behind the curve.
