A panel discusses how dental and service practices band together through virtual mergers, keeping independence while sharing training and software systems. Private equity is paying around 18x multiples for established practices doing $20-30 million yearly, but rarely buys small single practices. The model is popular in the U.S. but rare in Asia.
Questions this video answers
About 30 groups.
Approximately 18 times (18x).
Companies doing about $20–30 million per year.
About $0.5 million per year.
Chapters
It seems that the virtual merger still attracts.
What kind of conditions?
American.
Yeah.
Most Americans seem to be a very, very mature market.
What do you think? Asian market? Are there any such kind of markets in Asia?
Yeah, I don't know any of them in Asia. I'm trying to work on few deals with clients, but typically this is very popular because you can structure it however you want. It's very flexible. You can, you can structure it in such that, you know, I'm going to band, let's say 30 groups together and first all we're going to do is focus on training and development of that group.
Okay.
Then at, after the first stage, everybody's happy.
Okay.
Then you say, okay, let's go ahead and now all be on the same software.
And have the same management dashboards. So in the process, some company, they just want to go out, find a buyer and say, you know, we're all called, for example, you know, I don't know, Emergency Dental USA and sell it for some. Maybe they may stay together more and more and integrate more so they have a much higher valuation.
What will be the next rate for those two moves?
What is that?
What will be the next move for those larger? Are they maybe buyer or they go public.
It's totally up to the founder. If you want to take it public, you can take it public. If you want to find a buyer, private equity, we need to back it. You have arrangements with the dentist in place so they can actually stay on until they retire or if they want, if they want to retire sooner, then somebody el will take over. It's a very flexible option.
So at.
Seven very distinct groups now, in your experience.
The companies in their life cycle, after changing from a particular way of growth to another growth, or is it that some companies have straight away started with the virtual vendors and.
They have taken it from there?
It depends. Sometimes, you know, in the US right now it's becoming more popular to focus on the exit because of this amount of private equity funds that are available and they're investing and they're paying lots of money. I saw a transaction for 18 times the more of the. Okay, that is huge. So. So it really depends. Really depends.
But have you come across like some, like, don't you think that company will have to go organically for some time before they switch over to something like this or that they have something to show. They, they build up certain level before they move over to one of the, you know, other types of growth.
Growth patterns. Well.
The subcategories are already growing. These are practices that are already doing 5, 10 years, 20 years. They want to sell their business now, bringing it together. They're already established business. So for an investor, it's very. It's much easier to buy a practice that is doing a company that is doing 20, 30 million dollars a year. Year rather than small practices are doing only half a million dollar a year. Right. So. So this is the whole idea that banding.
