IDSO Partnerships

Sponsored Content

Over 1000 Invisible Dental Support Organizations (IDSOs) are eagerly contacting doctors to buy 51% to 80% of their practice for cash at low tax rates. Doctors retain ownership and continue to lead their practice as owners, with the doctor’s brand, team, and most importantly, IF you choose the right IDSO partner, FULL autonomy.

Over the last 24 months, LPS has created IDSO partnerships for GPs and all specialties, valued at over $1.0 billion for doctors in dozens of states.  Many LPS clients have achieved record initial values of over 10x EBITDA and 300% of collections; IF they have a growing practice!

Dozens of LPS clients participated in “recapitalizations” of their partner IDSOs in 2024. The doctors retained equity ownership increased in value by 300%, 500% and over 1000% in less than ten years.

What is Recapitalization?  

Recapitalization is a fancy term for a transaction in which the existing owners, both the IDSO investors and owner doctors, liquidate all or part of their retained ownership. Recapitalizations are generally with an investor larger than the current investor. Blackrock, the world’s largest asset manager, has invested in four IDSOs in the last 30 months!

One IDSO, with which LPS has partnered over 50 clients, completed their third recapitalization in seven years at a record $3.8 billion dollar value, up from their first at a value of $330 million. Eleven hundred percent (1100%) is not a bad return for the investors and doctors! LPS client doctors created generational wealth far greater than they could have by remaining independent. LPS helped its doctor clients “choose wisely” to quote a scene from Indiana Jones.

The Benefits of IDSO Partnership

Not all doctors will qualify for IDSO partnership. Only those with growing practices and at least $400,000 of EBITDA will achieve extraordinary values. However, qualified practices will gain the benefits of a larger, resourceful partner to enable them to grow bigger, faster and more profitably.

While IDSO support options range widely depending upon the IDSO partner a doctor chooses, generally all IDSOs will provide these services to their partner practices:

• Lower supply costs of 25+% (50% on Implants and Clear Aligners)
• Better team benefits at lower cost
• Accounting, banking, payroll, compliance, credentialling, tax, legal and IT support
• Recruiting and marketing resources
• And most importantly: Higher insurance reimbursement rates

In addition, doctors will have the option to provide ownership opportunities to associate doctors, and in some cases, key non-doctor employees. There is nothing better to solve recruiting and retention issues than the golden handcuffs of ownership.

What is an IDSO?

IDSOs are not a new concept. They have been quietly partnering with great dentists for over 35 years. The traditional, branded DSOs are an option for doctors seeking a short-term transition or retirement strategy. IDSOs are seeking partner practices with doctors who have at least a three to five years or longer chairside horizon. LPS has completed many IDSO partnerships for doctors in their 30s!

If you are 65 (like me) and ready to play more golf, the IDSO partnership is not your answer, unless you have a bench of young, eager associates.  But if you are a 35-year-old doctor seeking a partner to support your expansion and growth plan, an IDSO partner is a great option to consider.

Understand Your Value in an IDSO Partnership

Doctors should understand the world around them. Very few practices today are operating in a community without a DSO or IDSO. Doctors and patients may not know it, as IDSOs are truly a silent partner. But with 10,000+ IDSO partner practices across the U.S., the odds are high they are in your area.

Many doctors may not be interested in IDSO partnership today. However, they should ALL understand their potential practice value. Ultimately all larger practices will either join an IDSO or will compete with many. Doctors should learn about their competition!

LPS is primarily in the education business. In 2024, LPS signed over $700 million in new clients. Many of them have been interacting with LPS for years. Some doctors are now grasping that cash at today’s high practice values can enable them to diversify their personal investment portfolios and others are eager for a partner to support growth. Still other practice owners would like to sell into today’s rally in values to lock in future gains via the unique Earn Outs available today which pay a doctor for future performance.

Every doctor’s situation is unique. LPS’ mission is to ensure that all doctors understand the IDSO partnership option now and for the future.

Unique Fee Structure

LPS is the largest advisor in the dental practice monetization industry. We think it is for one simple reason: LPS is only paid by its clients, the doctors. Other advisors are paid by both buyers and sellers. Their motivation is to only show their doctor clients to IDSOs who will pay the advisor a fee. LPS is not paid by IDSOs and often has six or more qualified bidders for clients.

With LPS as a doctor’s advisor, they will meet with ALL of their qualified IDSO options, not just those which will also pay the advisor a fee. There is a difference, and it explains why LPS achieves record values for clients.

Doctors who would like to learn more about IDSO partnership can visit www.LargePracticeSales.com or email me directly at: Chip@LargePracticeSales.com to schedule a confidential, no obligation discussion. I promise you will learn something new!

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