Viper Equity Partners of Palm Beach, founded in 2009 by a group of business and financial professionals, has aligned over 50 dental practices with DSOs and private equity firms during the summer of 2018.
David Branch, a principal at Viper, says their focus is to become a key facilitator of deals, bringing the dental community and DSOs together. “We see the problem many DSOs are facing finding good practices to acquire. We are a solution and we want to help expedite this exciting consolidation in the dental industry,” stated Branch.
How Viper’s process works:
- an extensive marketing system is used to identify medical practices that meet specific criteria,
- teams meet with the practice owners who are interested in selling, growing or joining a platform,
- after contracted, the departmentalized Viper Teams conduct extensive due diligence on the practice, develop a business summary, and Confidential Information Memorandum,
- the practice is taken to market, targeting specific buyers.
Viper is skilled at helping the doctors understand the process. They feel the key is as much about valuation as it is about matching the parties that will work well together. They stay in the process until closing and consider themselves an asset to the process. “Our perfect scenario is to work directly with a PE Firm or existing DSO and go find them exactly what they are looking for in a practice. For example, if a firm says we want eight offices with ‘x’ in revenue, ‘x’ in EBITDA, no debt, and in Texas, then we go to work and find them,” stated Branch.
Viper is routinely working with over 40 practices at any given time in as many as 40 states. Their deal range is between 2 and 70 million. In dental, they focus on practices with one to four offices and between two to five million in gross revenue. Presently, they are in a growth mode to meet the needs of their partners.
Q&A with Dave Branch:
GDN: Why has dental become such a popular investment for private equity?
DB: Dental practices when run properly are very profitable and adapt very well into large organizations.
GDN: Where do you see the dental industry in five years?
DB: DSOs offer progress and sustainability for dentists. These large organizations have deep pockets, amazing marketing divisions, buying power, and are aligned with industry experts. There are over 1000 DSOs out there backed by over 100 billion dollars in capital. After 30 years in the business, and coming from a family of dentists, I think that over the next several years you will need to be part of a DSO to be successful.
GDN: Why should a dentist sell their practice now?
DB: Consolidation is happening. And like anything, its all about timing. The market for practices is hot and the money being paid for practices is at a historic high. Since a dentist is also a businessperson, why not explore the worth of the practice and take advantage of the seller’s market?
When dealing with private equity fueled markets, you don’t want to be the last one standing when the music stops. Dentists have no risk by looking, doing some calls and meetings and seeing what’s out there. I hear our clients say all the time that the experience of selling to a DSO has been great and they wished they had sold three years ago.
GDN: What do you offer dentists who are thinking about selling to a DSO?
DB: We offer free evaluations to all dental practices. That gives them an idea of what they would be looking at in terms of offers. Beyond that, we have two programs where we represent the practices in the market. Utilizing our 30 years of experience, we match each practice with the right opportunity for the best value.
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