How Dr. Scott Leune Unpacks DSO Affiliations: The Truth About Dental Private Equity, EBITDA, and Selling Your Dental Practice

In this insightful session of The Dental CEO Podcast, Dr. Scott Leune explores one of the most important topics for dental entrepreneurs today: DSO affiliations and the evolving landscape of dental service organizations (DSOs). This episode, titled Unpacking DSO Affiliations, dives deep into the realities of selling a dental practice, dental DSO deal structures, and understanding dental private equity.

Podcast Host and Guest

Host: Dr. Scott Leune

Dr. Scott Leune is not just a dentist—he’s a recognized thought leader and entrepreneur in the dental industry. As the founder of Breakaway Seminars, Dr. Leune has trained thousands of dentists across the country on how to grow, manage, and optimize their practices. His hands-on experience spans single practices, multi-location group practices, and ventures into DSO dental structures, giving him firsthand knowledge of the real-world challenges and opportunities dentists face.

Dr. Leune is also the host of The Dental CEO Podcast, where he shares insights on dental service organizations, dental private equity, leadership, and business growth strategies for dental professionals. His mission is to arm dentists with the tools, knowledge, and confidence to navigate complex business decisions like selling a dental practice or partnering with a dental DSO.

Guest: Brandon Moncrief

Brandon Moncrief serves as the Principal and CEO of McLaren & Associates, a leading sell-side advisory firm specializing in dental practice valuation, mergers, and acquisitions. His career has been dedicated to the business side of dentistry. Before acquiring McLaren & Associates, Brandon spent nearly a decade as a dental lender, financing acquisitions, startups, and expansions for dentists across the U.S.

Thirteen years ago, he took over McLaren & Associates and expanded its reach beyond traditional doctor-to-doctor transactions. Recognizing the rise of DSO dental affiliations and dental private equity involvement, Brandon transformed the firm into a national advisory powerhouse. Today, McLaren & Associates operates three offices nationwide with a 15-person team, guiding dentists through complex DSO affiliations and helping them maximize their practice value.

Brandon’s expertise lies in dissecting EBITDA dental practice metrics, structuring deals that align with doctors’ personal and financial goals, and defending practice valuations during negotiations with dental service organizations. His focus is on education and empowerment, ensuring dentists understand the full scope of their options when considering selling a dental practice.

Key Highlights from Dr. Scott Leune’s Perspective

DSO Dental Market Trends

Dr. Scott Leune emphasizes that the dental DSO landscape has evolved far beyond the negative perceptions of “corporate dentistry.” In the early days, DSO affiliations were often associated with rigid control, reduced autonomy, and a focus solely on profits. Scott explains that the modern dental service organizations model—what he calls DSO 2.0—has become more provider-centric. These organizations now focus on partnerships that preserve clinical independence while offering administrative support and financial alignment. Dr. Leune highlights that this shift allows dentists to maintain their practice culture and patient care philosophy while leveraging the resources of dental private equity-backed groups.

Understanding EBITDA in Dental Practice Sales

Scott believes that understanding EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is foundational for any dentist considering selling a dental practice. He explains that EBITDA dental practice metrics strip out personal expenses, owner compensation, and non-recurring costs to reflect the true profitability of the practice. Dental service organizations rely on these figures to assess the practice’s value as if an absentee owner were running it. Dr. Leune stresses that without knowing your EBITDA, you cannot accurately understand what your practice is worth in the eyes of a dental DSO or dental private equity firm.

Selling a Dental Practice: Avoiding Pitfalls

Dr. Leune is clear that most dentists are ill-prepared to navigate negotiations with dental DSOs. He shares that selling a dental practice is not as straightforward as agreeing on a price. Scott believes that dental private equity firms often lead with attractive multiples but use aggressive tactics to lower the offer by manipulating EBITDA dental practice calculations. Without proper representation, many dentists accept undervalued deals, leaving significant money on the table. He explains that understanding the deal terms—and defending your EBITDA—is just as important as the initial offer.

Deal Structure and Doctor Retention

Dr. Leune explains that deal structure is often the hidden factor that determines the real value of DSO affiliations. It’s not just about upfront cash. Scott breaks down common deal elements like equity stakes in the dental DSO, performance-based earnouts, and retention bonuses. These elements are designed to align the interests of both the doctor and the dental private equity investors. He emphasizes that without understanding these structures, dentists could lock themselves into unfavorable terms that limit future earnings or force longer commitments than anticipated.

Dental Private Equity’s Role in DSO Growth

Scott highlights that dental private equity is the driving force behind the rapid consolidation of dental service organizations. These investors aim for aggressive returns, often seeking to double or triple their money within a three to five-year window. Dr. Leune explains that dental DSOs backed by private equity acquire practices based on EBITDA dental practice performance, looking for strong margins and growth potential. Their goal is to roll up multiple practices, improve efficiencies, and sell to the next investor at a higher valuation.

Keyman Risk in Dental Practice Valuation

Dr. Leune identifies keyman risk as a major factor that influences dental practice valuation. He explains that when a practice relies heavily on one dentist—typically the owner—it poses a risk for dental DSOs because replacing that production is difficult. Scott advises reducing keyman risk by building a team of associates and spreading out production. This makes the practice more attractive to dental service organizations and can improve both EBITDA and overall valuation.

Market Timing and Preparation

Scott emphasizes that preparing for selling a dental practice is a long-term process. He encourages dentists to assess their EBITDA dental practice numbers well in advance—often years before a sale. Cleaning up financials, eliminating unnecessary expenses, and boosting profitability can significantly enhance the value of the practice. Dr. Leune believes that working with practice management consultants to optimize operations can add millions to the final valuation when engaging with dental DSOs or dental private equity buyers.

Avoiding Unsolicited Offers

Dr. Leune strongly warns against responding to unsolicited offers from DSO dental buyers. He explains that these offers are designed to capitalize on a dentist’s lack of market knowledge. Without creating a competitive bidding environment, dentists risk accepting subpar deals. Scott advises engaging with experienced advisors, like Brandon Moncrief, to run a structured process that generates multiple offers, maximizes competition, and ensures the best possible terms for selling a dental practice.

Final Takeaway

Dr. Leune believes that DSO affiliations can be transformative wealth-building opportunities—but only when approached strategically. He urges dentists to surround themselves with experts who understand dental private equity, EBITDA dental practice analysis, and dental practice valuation. With the right team, dentists can confidently navigate dental DSO negotiations and secure deals that align with their financial goals and professional values.