Dental Practice Acquisition Valuation Calculator
Value a dental practice for acquisition using all three 2026 methods: percentage of collections (65-85%), SDE multiple (1.75-2.25x), and EBITDA multiple (5-12x for DSO buyers). Cross-checks private-buyer and institutional valuations side by side.
Practice Financials
General practices trade at 65-85% of annual collections in private sales (2026). DSO acquisitions price at 5-12x EBITDA, with a 40-80% premium over private-buyer valuations.
Valuation Multiples
Practice Valuation
Enter practice financials and multiples, then click calculate.
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Introduction
Buying a dental practice is the largest financial decision most dentists will ever make, and the valuation gap between a private buyer and a DSO can be hundreds of thousands of dollars on the same practice. General practices trade at 65 to 85% of annual gross collections in a private sale, while DSO and private equity buyers pay 5 to 12 times EBITDA, with a 40 to 80% premium over the private-buyer value according to 2026 dental transition market data from Private Practice Research and dental brokers including AFTCO and Henry Schein Practice Transitions. The method that applies is not a matter of preference. It is determined by practice size and buyer type. A solo GP under $1 million in EBITDA uses percent-of-collections and SDE multiples. A multi-location group over $1 million in EBITDA prices institutionally on an EBITDA multiple. This calculator runs all three methods on the same financials and shows the private-buyer and DSO values side by side, so you know which number to negotiate from.
What This Calculator Does
This tool values a dental practice for acquisition using three methods: percentage of collections, SDE (Seller's Discretionary Earnings) multiple, and EBITDA multiple. It computes SDE from collections, overhead, and owner compensation, derives a DSO-view EBITDA by replacing the owner with a market-rate associate, and recommends a value based on whether the buyer is private or institutional. It reports the range for each method as a cross-check.
The Formula
Percent of collections is the fastest directional estimate and the one dental brokers cite most, because collections are harder to manipulate than earnings. SDE is the private-buyer earnings measure, equal to practice net income plus owner compensation and discretionary addbacks. The EBITDA view replaces the selling doctor with a market-rate associate at roughly 35% of production, which is how a DSO underwrites since they will not have an owner-doctor working for free. The 35% replacement factor is an industry approximation for associate compensation as a share of production. The recommended value blends the collections and SDE methods for a private buyer, and uses the EBITDA multiple for an institutional buyer, since those are the lenses each buyer type actually applies.
Step-by-Step Example
Enter practice financials
A buyer evaluating a $900,000-collection GP practice enters $900,000 in collections, 62% overhead, and $250,000 owner compensation.
Set the multiples
She uses 70% of collections, a 2.0x SDE multiple, and a 6x EBITDA multiple, which are mid-range 2026 figures for a private buyer and a small DSO add-on.
Choose the buyer type
She runs it as a private buyer first, then switches to DSO to see the institutional value.
Read the result
Private value is roughly $600,000 to $675,000 (collections and SDE methods), while the DSO EBITDA value is higher, reflecting the institutional premium.
Real-World Use Cases
Negotiating a purchase price
An associate buying out a retiring owner uses the collections and SDE cross-checks to anchor the offer, since the seller's broker will quote the high end of the range.
Evaluating a DSO offer against a private sale
A practice owner compares a DSO letter of intent against a private-buyer offer, quantifying the premium the DSO pays and weighing it against the post-close employment restrictions.
Partnership buy-in valuation
A junior partner uses the SDE multiple method to value the practice for a buy-in, since the percent-of-collections method understates value for a profitable low-overhead practice.
Common Mistakes to Avoid
Using collections percentage on a high-overhead practice. Percent of collections ignores profitability. A $1 million practice at 80% overhead is worth far less than one at 55% overhead, even at the same collections. Always cross-check with SDE or EBITDA.
Confusing SDE with EBITDA. SDE includes the owner's compensation and addbacks, which is what a private buyer who will work in the practice earns. EBITDA replaces the owner with an associate, which is what a DSO earns. Using SDE for a DSO deal or EBITDA for a private deal misprices the practice.
Ignoring the DSO qualification floor. DSOs rarely engage below roughly $250,000 in post-doctor-compensation EBITDA. A small solo practice may not qualify for institutional pricing at all, and the buyer pool drops back to private buyers at a lower multiple.
Forgetting transition and real estate costs. The valuation is the practice value. A building sale, a transition consulting fee, and a non-compete are often separate. Adding them to the practice price inflates the multiple and makes comparable deals look cheaper.
Frequently Asked Questions
What is the difference between SDE and EBITDA in a dental practice valuation?
SDE (Seller's Discretionary Earnings) is net income plus owner compensation and addbacks, and it reflects what a private buyer who works in the practice earns. EBITDA replaces the owner with a market-rate associate at roughly 35% of production, reflecting what a DSO or institutional buyer earns. Private buyers use SDE multiples of 1.75 to 2.25x. DSOs use EBITDA multiples of 5 to 12x depending on scale.
Why does a DSO pay more than a private buyer?
DSOs and private equity buyers pay a 40 to 80% premium over private-buyer valuations because they can centralize billing, purchasing, and marketing, and because they value the platform and patient base strategically. The premium is real, but it usually comes with a post-close employment agreement and non-compete restrictions.
What is the right percentage of collections for a general practice?
General practices trade at 65 to 85% of annual gross collections in private sales in 2026. The low end fits high-overhead or declining practices. The high end fits low-overhead, growing practices with a strong active patient base. Use the percentage as a directional check, then confirm with SDE.
How is the associate replacement cost estimated?
The calculator uses 35% of owner compensation as the associate replacement cost, which is an industry approximation for associate pay as a share of production. Actual associate compensation ranges from 28% to 40% of production depending on the market and experience. Adjust the owner compensation input to reflect a market-rate associate if you have a specific figure.
Does the valuation include equipment and real estate?
The practice valuation typically includes the equipment, fixtures, and intangible assets (patient records, goodwill). Real estate is usually valued and sold separately, or leased back to the buyer. Confirm what is included in the purchase agreement, since mixing real estate into the practice multiple inflates the apparent valuation.
Accuracy and Disclaimer
This calculator estimates dental practice value using the percent-of-collections, SDE multiple, and EBITDA multiple methods with 2026 industry ranges. The associate replacement factor and multiples are industry approximations that vary by practice size, location, payer mix, overhead, and buyer type. Actual transaction values depend on due diligence, financing, transition terms, and market conditions. This is not business valuation advice or a substitute for a formal appraisal. Consult a dental transition broker, a CPA, and a transaction attorney for a practice-specific valuation and deal structure.
Conclusion
A dental practice valuation is only the opening bid. Run the financing with our Business Valuation Calculator for a cross-check, and benchmark the acquired practice's overhead with the Dental Overhead Percentage Calculator to model post-close margin.
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