M&A & Diligence Support for Dental Practices
A DSO arrives with a model, a legal team, and a very specific idea of what you should be paid to keep drilling after the sale. Diligence is where that model meets your actual books. If the two don't get along, the price moves — usually not up.
What diligence actually feels like
Under a letter of intent, a DSO's accountants and lawyers send detailed request lists — financials, tax, production reports, payor contracts, payroll, patient and compliance records — and expect fast, organized, consistent answers that reconcile to each other. Any gap between your production numbers and your financials becomes a question.
You're still seeing patients while this happens. DSO diligence is thorough and fast, and a practicing dentist rarely has the bandwidth to manage it well alone. The doctor-compensation adjustment — what you'll be paid post-sale to do your own clinical work — sits at the center of everything.
M&A support is the finance seat that runs the data room, answers the DSO in their language, and keeps the deal moving while you keep the chairs full.
The dental deal-killers hiding in plain sight
Buyers focus on dental-specific risks. Is the normalized doctor compensation defensible, and are there associate employment and non-compete agreements to keep production after you leave? Do payor contracts and credentialing transfer to the new owner? Are prepaid treatments and ortho contracts booked as deferred revenue? Is the practice compliant on patient records and HIPAA?
They'll expect schedules owners rarely keep ready: provider agreements, payor and fee-schedule detail, recall and hygiene recurring revenue, and a doctor-comp normalization that survives the DSO's own model. Prepared, these hold your valuation. Missing, they invite the DSO to rebuild it lower.
We build the financial and production schedules, normalize doctor comp defensibly, coordinate payor and compliance documentation with your attorney, and have the answers ready — so the DSO confirms your number instead of quietly repricing it.
How Kaizen runs it
We build and manage the data room, normalize and defend doctor compensation, correct deferred-revenue treatment, respond to diligence requests, defend adjusted EBITDA and add-backs, model the working-capital peg, and coordinate with your attorney and banker so finance never stalls the deal. One point of contact owns every number the DSO questions.
We're named after continuous improvement, which in a dental deal mostly means reconciling your production reports to your financials before the DSO gleefully points out that they don't match.
What's included
- Data room built and managed: financials, production reports, tax, payroll, compliance
- Doctor and associate compensation normalized and defended against the DSO model
- Recurring hygiene/recall revenue and payor mix reconciled to the financials
- Prepaid-treatment and ortho deferred revenue corrected and defended
- Payor contract, credentialing, and provider-agreement transfer documented
- Patient-records and HIPAA compliance posture scheduled
- Working-capital peg modeled and the closing true-up negotiated
- Coordination with your M&A attorney and investment banker through close
Pricing
Straight answers
Why does the DSO care so much about my salary?
Because they must pay a dentist to do your clinical work after the deal, and that cost comes out of the earnings they're buying. If the normalized doctor comp isn't defensible, they'll set it conservatively and your valuation drops. Getting it right is the single biggest lever in a dental deal.
Do my payor contracts and credentialing transfer automatically?
Not always — some require consent or re-credentialing under the new ownership, which takes time. We document the payor and credentialing position early and coordinate with your attorney so it's planned rather than discovered at closing.
Can you help me acquire a dental practice?
Yes. Buy-side, we test the target's production-to-financials reconciliation, doctor-comp assumptions, payor mix, and add-backs — so you know what you're buying before you commit.
I have a great practice manager. Do I still need this?
For running the office, absolutely keep them. For a DSO diligence process that audits your books against your production on a tight clock, that's specialized deal work most managers aren't set up for. If yours genuinely is, keep your money.
Related
Free 20-minute books assessment
We'll show you the five things we'd fix first in your books — useful whether you hire us, hire someone, or do neither.
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