By Troy Jones, M&A Advisor, Professional Transition Strategies.
One of the best parts of being a dental practice broker is that I’m given a unique line of sight into new trends in the industry. Something that we’ve been noticing at Professional Transition Strategies (PTS) is that the average age of dental entrepreneurs selling their practice is getting significantly younger.
In fact, most doctors we worked with before the pandemic ranged from 55 to 58 years old, as many of them were gearing up for retirement. Now, the average age of a dentist selling their practice with us is down to 44 years old. And we suspect this is a phenomenon happening all around the country.
So, what’s causing this huge drop in age?
There are a couple factors at play, but it comes down to two major components: the industry’s consolidation wave and the fallout from the pandemic. The sweeping consolidation happening across the industry is highlighting new opportunities for dentists – and many are taking advantage of them. Coming out of the pandemic, many businesses and industries reshuffled their operations which lends itself to changes in dentistry.
Here’s a closer look at why younger dental practice owners are choosing to sell their practice sooner rather than later.
Consolidation Gives Way to Equity Arbitrage Opportunities
As dentistry is undergoing industry consolidation, it’s given rise to many new financial opportunities for dentists, which contributes to this trend. Private equity backed dental service organizations (DSOs) provide an alternative to traditional partnerships. In the past, many dental entrepreneurs on their path toward retirement would bring in an associate to take over after they stepped away; however, associateships have an extremely low success rate, making them an undesirable route for many.