Here’s a well-run, multi-location dental practice group in the Midwest—quietly producing over $2.1 million in EBITDA, with five offices, ten dentists, thirty-five staff, and a rock-solid patient base across three counties.
What makes this business exceptional isn’t just the scale. It’s the structure: three of the offices are 100% associate-run, with centralized billing, marketing, scheduling, and supply procurement. The founder has already stepped back from the chair. There’s an in-house operations manager. All patient records are cloud-based. Each location has over 1,800 active patients.
The group is listed for $5.5M, and both the seller and two associate dentists are open to equity rollover or structured compensation tied to post-close performance. That opens the door to a creative acquisition using SBA 7(a) senior debt, seller financing, and an earn-in model for critical team members.
In this article, we’ll walk through the acquisition mechanics, the growth levers available, and the precise structuring tactics Eagle Dawn Capital uses to help buyers acquire regional healthcare businesses with long-term cash flow and true operator independence.
Business Snapshot
- Asking Price: $5,500,000
- Locations: 5 dental offices (suburban + semi-rural)
- EBITDA (normalized): $2,150,000
- Annual Revenue: $7.8M
- Active Patients: ~9,300
- Payor Mix: 74% PPO, 18% FFS, 8% Medicaid
- Clinical Team: 10 dentists (6 associates, 4 part-time), 6 hygienists, 19 assistants/front office
- Support Team: 1 operations manager, 1 marketing manager, 2 billers
- Tech Stack: Dentrix, Weave, cloud-based imaging system
- Real Estate: 3 leased, 2 owned (seller open to lease or sale)
- Reason for Sale: Retirement and relocation out of state
- Post-Sale Involvement: Seller open to 12-month transition, advisory, or 10–15% equity rollover
What Makes This Deal Unique
Most buyers hunt for a single-practitioner office with decent earnings. This is a mid-sized group with embedded systems, real management, and operational independence:
- Associate-Reliant Revenue: The majority of production is generated by non-owner clinicians, which means the business doesn’t collapse when the founder exits.
- Contracted Staff: All dentists are under enforceable employment contracts with 12-month non-competes and 6-month tail clauses. Associate turnover is under 10% over five years.
- Centralized Infrastructure: Scheduling, billing, HR, and marketing are consolidated across all sites. There’s one billing team, one software instance, and unified patient communications.
- Value-Based Care Ready: The practice has internal quality metrics, call tracking, recall performance, and patient satisfaction KPIs. This will appeal to any future PE-backed DSO buyers
Acquisition Capital Stack
Eagle Dawn Capital recommends the following structure to maximize SBA leverage while securing staff alignment and preserving cash flow:
Purchase Price: $5,500,000
- SBA 7(a) Loan: $3,850,000 (70%)
- 10-year amortization
- Interest rate ~10%
- Monthly P&I ~$50,500
- Includes $250K in working capital
- Seller Note: $825,000 (15%)
- Subordinated to SBA
- 6% interest-only for Year 1
- 60-month amortization with balloon clause
- Buyer Equity Injection: $550,000 (10%)
- Buyer capital or equity from silent partners
- Associate Rollover Pool: $275,000 (5%)
- Retained via phantom equity, profit share, or actual membership units with time vesting
This capital stack limits buyer exposure while incentivizing associate retention and giving the seller a continued upside interest without day-to-day involvement.
Legal Entity Structure
Given the healthcare regulatory environment and state licensure rules, this transaction should be structured with a Management Services Organization (MSO) model:
- OpCo (Professional Entity): Owned by licensed dentists only
- MSO (Management Entity): Acquired by buyer or holding company, owns non-clinical assets, staff, leases, and collects management fees
This allows non-clinical investors (including buyers who aren’t dentists) to acquire and operate the business without violating corporate practice of medicine/dentistry laws.
Eagle Dawn Capital assists buyers with state-compliant entity structuring, licensing coordination, and MSO documentation in conjunction with dental law counsel.
Post-Acquisition Growth Levers
1. Hygiene Optimization
Two offices currently operate hygiene schedules at 65% of available chair time. By adding one hygienist per site and marketing hygiene recall appointments, the practice could generate an additional $750K–$900K in annual revenue with minimal additional overhead.
2. Add Specialty Services
The group currently refers out all oral surgery, ortho, and endo. By hiring 1–2 specialists on a rotating weekly schedule across locations, the group could bring 30–40% of referrals back in-house.
3. Expand Medicaid Service Area
Only one office currently accepts Medicaid. By credentialing a second location, the business can pick up underserved pediatric and low-income patients—who often present less competitive market pressure.
4. Increase Operating Days
Two of the five locations are open only 4 days per week. Expanding to full 5-day service and rotating extended hours could yield significant production lift with little incremental cost.
5. Potential Roll-Up or Hub Expansion
The business already has an in-house marketer and biller. Adding a sixth and seventh location within a 30-mile radius would increase patient density without increasing back-office cost.
Transition Support and Risk Mitigation
The seller is open to 12 months of transition and will assist with:
- Associate retention planning
- Payor contract transitions
- Vendor management (supply, labs, benefits)
- Marketing handoff and QBRs with referral sources
Key risks include:
1. Dentist Retention:
Mitigated through bonuses tied to post-close performance, phantom equity, or structured buy-in rights over 24 months.
2. Clinical Production Loss:
Not a risk here—owner only produces 7% of total revenue and hasn’t taken new patients in over a year.
3. Payor Pressure:
Margins are stable. PPO fee schedules have been fixed for 24 months, and FFS revenue has grown 9% year-over-year.
4. Regulatory Licensing:
Eagle Dawn Capital helps buyers navigate DSO licensing, provider number transfers, and credentialing updates to avoid delays.
Exit Strategy and Valuation Growth
Buyers should view this as a 5-year platform to build and sell to a regional DSO or financial sponsor.
With 7–10 locations, >$4M EBITDA, and a clean OpCo/MSO separation, this business could exit at 6–7.5x earnings.
Sample 5-Year Exit Scenario:
- EBITDA: $4.1M
- Multiple: 7x
- Enterprise Value: $28.7M
- Debt Remaining: ~$1.8M
- Net Equity to Buyer: ~$27M (plus annual distributions over 5 years)
This is the playbook DSOs run—now it’s available to independent buyers who structure it properly.
Ideal Buyer Profiles
- Licensed dentists with multi-location aspirations
- Dental executives or former DSOs seeking their own platform
- Investment partnerships with licensed clinician equity
- Physician groups looking to diversify with passive service business income
How Eagle Dawn Capital Helps
We don’t sell businesses. We help buyers take control of them—with confidence and clarity. For healthcare transactions, we:
- Underwrite financials and deal risk
- Structure SBA + seller + associate capital stack
- Coordinate with dental law and MSO structuring
- Advise on post-close hiring, marketing, and hygiene optimization
- Help plan 3- to 5-year roll-up or recapitalization timelines
Ready to own a high-margin, multi-location dental platform with built-in infrastructure and upside?
Visit www.eagledawncapital.com to start the buyer onboarding process.
Disclosures: Eagle Dawn Capital is not a legal or investment advisory firm. All business acquisitions involve risk. Past client experiences are not predictive of future results. No income, performance, or outcome is guaranteed. This content is for educational and informational purposes only.
