A DSO approaching you directly isn’t a sign that your practice is especially valuable. It’s a sign that they’d rather not compete. Direct offers skip the market, eliminate competing bids, and give the buyer control over the conversation. Before you respond, it’s worth understanding what the offer reflects – and what it doesn’t.
Why DSOs Go Direct
DSOs go direct because it’s cheaper for them. Running a competitive process – multiple bidders, multiple advisors, multiple offers to evaluate – takes time and drives prices up. When a DSO reaches you without a broker in the picture, they move faster, pay less in transaction costs, and negotiate against a seller who hasn’t seen the market.
The letter you received is non-binding. It’s an opening position. The DSO’s team wrote it knowing you haven’t received competing offers, haven’t engaged a sell-side advisor, and may not have an independent valuation to compare it against.
Understanding how DSOs differ from other buyer types is useful context before evaluating any offer.
What the Offer Is (and Isn’t)
A direct offer is a letter of intent. It expresses interest and contains an initial number. That number is not a final valuation – it’s what the DSO believes it can pay before competitive pressure forces it higher.
The headline number
The headline price is only part of the transaction. How much of it is cash at close versus earn-out, rolling equity, or an employment agreement structure matters as much as the total. A letter that reads “$3 million” may mean $1.8 million cash at close and the rest contingent on future performance metrics you haven’t negotiated yet.
What you don’t know yet
You don’t know how many other DSOs or corporate buyers would bid on your practice. You don’t know what your practice would clear in a competitive process. That information gap is exactly what the DSO is counting on.
The Questions Worth Asking Before You Respond
Before you respond to a direct offer – or continue any conversation with the buyer – work through these honestly:
Have you received multiple offers? One offer from one buyer is not a market read. It’s one buyer’s opening position.
Do you understand the full deal structure? Purchase price, cash vs. equity split, employment agreement terms, post-sale clinical autonomy, earn-out conditions. Get specifics on each before you engage.
Are you comfortable negotiating complex transaction terms independently? Due diligence, representations and warranties, working capital adjustments – these are areas where buyers have professional teams and most sellers don’t.
What do you know about this buyer? PE backing, financial stability, integration track record, and how prior selling doctors describe the experience are all questions worth answering before you proceed.
“Don’t jump into bed just because the dollars are right. Look for somebody that you can be partners with,” said Dr. Max Kerr.
Our dental practice valuation calculator takes about 3 minutes and gives you an independent read on where your practice stands before you respond to anything.
What Competitive Tension Actually Produces
When PTG takes a dental practice to market, sellers typically see multiple offers – not one. Those offers compete against each other. That competition is the mechanism that drives prices up and improves terms.
“Thomas basically predicted that we would see a certain amount of offers from these specific groups. And that’s exactly what happened,” said Dr. Robert Hendricks.
That quote describes something specific: PTG knows the buyer landscape in advance. They know which DSOs are active in which markets, what they’re paying, and what the competitive field looks like for a given practice. That knowledge doesn’t come from receiving one direct offer. It comes from running competitive processes across hundreds of transactions.
Responding to a direct offer without understanding that landscape is your choice. But it’s worth knowing what you might be leaving on the table. Understanding how practice advisors work before you engage – or decline to – puts that choice in context.
FAQ
Should I respond to a DSO that sent me a direct offer?
You don’t have to respond immediately. A serious buyer will remain interested while you take time to understand your options. If you want to respond, acknowledge receipt and indicate you’re evaluating it. Do not negotiate price or structure before you have an independent valuation and a clear picture of what you want from the deal.
How do I know if a DSO offer is fair?
Fairness depends on context: what comparable practices in your market are transacting at, what your EBITDA multiple looks like relative to current rates, and what the full deal structure means in actual cash terms. An independent practice valuation is the starting point. Our dental valuation calculator provides a rough estimate.
Do I need a broker if I already have an offer?
Having an offer is actually one of the strongest moments to engage an advisor – you already have leverage. The offer confirms at least one buyer wants your practice. An advisor can determine whether that offer is competitive, whether better buyers exist, and how to respond. Advisors often improve outcomes most when a seller has a starting point to build from.
What happens if I negotiate directly with a DSO without an advisor?
The DSO’s legal and M&A team negotiates transactions for a living. Most practice owners do it once. The experience gap typically shows up in deal structure, representations and warranties, and post-close obligations – not just the headline price.
How many DSOs typically bid on a dental practice?
It depends on revenue, specialty, geography, and EBITDA. A competitive process for a well-positioned dental practice often draws 3-6 serious offers. PTG pre-qualifies buyers before approaching the market, which keeps the process efficient while maintaining genuine competition.
Not Sure What Your Practice Is Worth?
Before responding to any offer, get an independent read on your market value. Our dental practice valuation calculator takes about 3 minutes. If you want a more complete picture of what a competitive process could look like for your practice, reach out.
