Whew – what a year! 2019 was a whirlwind of activity at TUSK and in the DSO economy. We saw a significant amount of change, growth, M&A activity and new entrants into the market that it is hard to keep track of. Before we dive into 2019, let’s reflect on how the year started by looking at how 2018 ended:

- We saw transformational growth of some of the enterprise level DSOs including Heartland and Pacific Dental both adding 100 practices or more and NADG growing the number of affiliated practices by 49% in just one years’ time.  New doctor-founded, debt-funded groups were popping up on our radar regularly.

- Attendance at almost all DSO conferences were up big – interest in the space was growing.

- We were getting a call from a new Private Equity Group interested in the DSO space a couple of times a month.

- At TUSK, we sold more practices than ever before, across all specialties at multiples well above our client’s (and frankly our expectations) and worked with well over 70 groups to help them START, GROW or SELL their practice or group.

We are pleased to announce that TUSK Partners was named as one of Axial's Top 25 Lower Middle Market Healthcare M&A  Advisors in 2019.  TUSK Partners is one of the most active M&A Advisors in the Dental Economy and works with dentists, Group Practices and DSOs nationwide.  Today, TUSK Partners represents over $250 million of transactions and continues to see the pipeline grow.  Kevin Cumbus, President | Co-Founder & Managing Director of the M&A Advisory business shared:

"2019 has been a remarkable year for TUSK Partners and all of our clients.  We have been able to achieve exits for our clients that far exceed their expectations and aided in the creation of wonderful partnerships among our clients and buyers in the market.  I am most satisfied with the work we have accomplished with clients who come to us after they have received unsolicited offers from the buy-side.  In every one of these situations, we have been able to bring more buyers to the table, provide our clients better buy-side choices, and driven up the price of their business by an average of 35% and in once case, 56%.  There is no better time to own or sell a practice or group than today." 

I have been in the business of valuing and selling dental practices since 2007. Over that time a lot has changed. 

In 2007, I joined well-established dental practice valuation and transition company. We worked exclusively with dentists to help them establish a value for their business for the purposes of either a 100% sale or for a buy-in from the associate or future partner. Our valuation process was always the same. We would request a stack of documents, including tax returns, P&Ls, historical production and collections reports, and payer by source reports. In return our client would mail us 7-11 inches of paper to wade through. We would pour all of this data into a financial model and turn it into information. Next, we would work with the doctor to establish the net income from the business then perform 7 intricate valuations methodologies and weigh each one based on various qualitative aspects of the business. It was a thorough and rigorous process that took days to complete.

Bringing Wisdom To Leadership.

We at TUSK are lucky to call Dr. Marc Cooper not only a colleague but a true friend. Over the years, Marc has been a vital resource to my personal journey as an entrepreneur and to TUSK Partners. I credit Marc for guiding us early on and propelling our company into the DSO universe by inviting us to join him on the stage in 2017 at the ADSO. It was the first step in a long journey for TUSK, and I will always be grateful for his kindness.

From Fraud and Failure to Double-Digit Exit Multiples, Dykema Reminds Us All How Far the DSO Economy Has Come in Recent Decades.

Those who braved the summer heat of New Orleans to attend Dykema’s 4^th Annual Definitive Conference for DSOs earlier this month left well informed about our ever-changing DSO economy. 

Brian A. Colao (Director of Dykema’s DSO Industry Group, and his industry leading team hosted over 400 attendees to a 2-day information-packed survey of the DSO market.  This conference had a markedly different feel than most that we have attended this year – it had both a reflective perspective from Colao reminding the audience how the DSO economy has evolved in recent decades as well as the feel of a Survey Class of the current market with profiles of 2 of the largest names in the space: Craig Abramowitz (co-CEO of Dental Care Alliance) and Dr. Sulman Ahmed (Founder and CEO of Deca Dental). 

Disruption and innovation was the underlying theme of this year’s 2017 Mastery Summit on Group Practice in Phoenix, AZ.

TUSK was invited to the 2017 ADSO Summit  to share the stage with Dr. Marc Cooper of the Mastery Group to present to emerging group practices and DSOs. I focused on the Strategies + Tactics to grow your group / DSO, while Dr. Cooper discussed the leadership qualities necessary to build a group. We had the pleasure of presenting to over 200 industry professionals over the course of 4 hours – it was a remarkable morning.

Last week, my Partner, Diwakar Sinha, and I spent most of the week at the American Academy of Dental Group Practices (AADGP) Expo ’17 in Las Vegas, NV.  The trip was full of reconnecting with old friends and clients and making new connections as well.  There was plenty of excitement this year as it was the 45^th Annual Session, and Henry Schein sponsored an additional day of presentations and study before the AADGP on Wednesday.

Your dental practice isn’t worth 60-85% of collections or 6-12x earnings before interest, tax, depreciation, and amortization (EBITDA).  It’s worth what someone is willing to pay for it.