Why the patient base is the asset
A practice's equipment is replaceable and its lease is negotiable; the active patient file is what the buyer is actually paying for. The multiple moves on how durable that file is: how "active patient" is defined in the management software, whether new-patient flow replaces attrition, and how much production recurs on hygiene recall rather than one-off treatment. Payer mix sets the margin behind it all, a fee-for-service file and a PPO-heavy file with identical collections are different businesses.
What buyers check first
- Active patient count and definition. Pull it from the practice software; 12-month and 18-month definitions differ by hundreds of patients.
- New-patient flow by month. A shrinking file at a full-price multiple is the classic overpay.
- Hygiene recall share of production. The recurring layer; it is what makes the cash flow bankable.
- Payer mix and fee schedules. Who pays, and at what negotiated rates, sets the real margin.
A dental practice is a patient file with a lease attached. Price the file, not the equipment list.
The seller's transition sets the retention
Patients follow habits, not signage, and the handover decides how many stay. The purchase agreement should fix the selling dentist's transition period, the introduction protocol, and a non-compete with real geography. DSO offers can look a full turn richer than private bids; read them against the EBITDA definition, the equity rollover, and the employment terms attached, because the headline multiple rarely arrives as cash at close.
Buyer's move
Ask the practice software for production by provider and by category for 36 months. If hygiene recall is thin or the selling doctor produces most of the treatment revenue personally, the file is worth less than the topline suggests, and that is your negotiating room.
Sources
Dental Practice valuation multiples, FAQ
Typically 2–4× SDE in a private sale, per Acquisition Ace market experience. On $250,000 of SDE that is a $500,000 to $1,000,000 price. Where a practice lands in the band depends mostly on the durability of the active patient file and the payer mix.
DSOs price on 3.5–5.5× EBITDA measured after replacing the selling doctor at market compensation, and they underwrite group economies a solo buyer does not have. The two multiples apply to different earnings bases, so a DSO number and a private-sale number are not directly comparable.
The percentage-of-collections shorthand still appears in listings, but it describes asking prices, not settlements. Sold deals settle on earnings: SDE for private sales, EBITDA for DSO deals. Two practices with identical collections and different overheads are worth very different amounts.
Keep going
Compare every sector on the industry multiples hub, learn the buy playbook in our how to buy a dental practice guide, price a specific deal with the valuation calculator, and see the broader market in our SMB statistics.
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