The world of dentistry is changing, and you might have heard some buzz. Whether it’s because of the Canada Dental Care Plan (CDCP), or dropping interest rates, you always need how things are impacting the value of your practice. Since 2022’s all-time high practice valuations, things are slowing down.
For practice owners who have been in the business for 10 years or more, this next wave of industry changes is more important than ever. It’s not just a rumor; experts predict that in the next 10 to 15 years, as many as 75% to 80% of dental practices will join a larger dental support group or organization.
Read on to understand what this means for your practice and how you can prepare.
The First Wave of Dental Mergers and Acquisitions
The first big wave of mergers and acquisitions (M&A) in dentistry started around 2010. This was when investors began to see dental practices as great business opportunities with stable income. The uptick in acquisitions lasted until 2021, when higher interest rates made it more expensive for buyers to get loans, and the market for dental practice purchases began to cool.
The Next Wave of Dental M&A has already started
Now, the market is set for a second surge in 2025.
Why? Large dental groups, known as Dental Service Organizations or DSOs, have new money partners who want them to grow fast. This means they are going to be looking to buy practices more aggressively.
This comes at a time when there are other major changes in the Canadian dental world. For example, the new Canadian Dental Care Plan (CDCP) is expected to bring a significant number of new patients to dental offices—up to 9 million more Canadians. While this is great news, many independent practices are already struggling with staffing and management issues that leave them underprepared for a sudden increase in patients. On the other hand, DSOs, with their larger teams and business resources, are equipped to handle this influx of new patients, making them attractive to join for owners who feel overwhelmed.
“Timing” the Sale Isn’t as Important as Being Prepared
You might think that waiting for the “perfect time” to sell is the best strategy— but that simply isn’t true in 2025. Today, the real key to getting a great deal is being prepared. This means doing the work now to make your practice as strong as possible. A practice with solid business systems, good profitability, and a clean legal history will always be attractive to buyers, no matter what the market is doing.
The 3 most important things you need to prepare your dental practice for sale are:
- Get Your Finances in Order: Buyers need to see clean, accurate financial records. You should know your numbers, especially your overhead costs and profit. DSOs are looking for practices that have a profit of more than 20%.
- Optimize Your Operations: This means using technology to make your practice more efficient. Think about things like AI for diagnostics, automation for insurance, and cloud-based systems for better workflows. These things not only make your practice more valuable but also make your life easier.
- Plan Ahead with Advisors: Having a team of experienced advisors, like legal and financial experts, can help you clean up your practice and get it ready for a sale. You only get one chance to sell your life’s work, so it’s smart to get the right help.
The second wave of dental M&A is a huge change, but it’s not something to fear. It’s a chance to get your practice into the best shape it can be, so when the time comes to sell, you can get the best possible deal on your terms.
