Healthcare Trend Report: Dental Support Organizations (DSOs)
As the landscape of dental healthcare continues to evolve, Dental Support Organizations (DSOs) are navigating both persistent industry strengths and emerging market challenges. This report, authored by Healthcare Transactions attorney David Marks, analyzes current trends shaping DSOs, highlighting that while large-scale DSO investments face challenges. The sector remains robust in the middle and lower markets, consistently attracting private equity and lender interest due to ongoing demand, favorable reimbursement trends, and opportunities for operational innovation.
Key innovations are emerging in DSO deal structures, including increased use of structured equity, creative "second bite" mechanisms for liquidity, tracker equity efficiency, rigorous compliance checks, and a rise in private credit availability. The report notes that, despite short-term hurdles for large DSOs, sector fundamentals remain strong: demographic and wellness trends continue to drive demand, the industry's fragmented nature leaves ample room for consolidation, and improved staffing outlooks and technological advances support long-term growth. Regulatory changes, as well as investor and lender expectations, are driving deal creativity and integration efforts. Holland & Knight underscores their leadership in the sector, having closed more than 250 dental deals since 2022.
