Dental Practice Management Earnout Structures: An Independent Sponsor's Counsel
Independent sponsor counsel for dental practice management, focused on Earnout Structures and the deal mechanics that protect sponsor economics and LP alignment.
The economics on a dental practice management platform deal usually hinge on a handful of structural decisions. Earnout Structures is one of them.
The typical dental practice management platform sits at $10M to $130M EV with EBITDA in the $2.5M to $22M range. The thesis runs on DSO buy-up under an MSO. Insurance mix dictates valuation. Read the PPO contracts before the EBITDA.
How Earnout Structures actually gets structured.
Tie the earnout to gross profit or contribution margin, not revenue, to avoid sandbagging.
Cap the earnout window at 24 months. Anything longer is a litigation risk.
Build acceleration on a change of control or buyer-driven operational change.
Name an arbitrator and the accounting standard in the agreement.
In dental practice management, layer in MSO model documented per state as part of the Earnout Structures workstream.
Drafting the earnout in three paragraphs. Earnouts are the second-most-litigated provision in M&A.
"If the earnout could be measured by a teenager with a spreadsheet, you wrote it well."Jason Powell · Earnout Structures
The deal is one thing. The capital that opens up after close is another.
After close, the call list for refinancing, recapitalization, and growth equity gets short and known. Jason carries that list.
Related deal pages.
LOI Negotiation for Dental Practice Management
The 4 to 8 page agreement that frames the deal economics, exclusivity, and diligence period.
Independent Sponsor Economics for Dental Practice Management
The package of deal-by-deal carry, management fees, and transaction fees that compensates the independent spo…
Management Fee Structuring for Dental Practice Management
The annual fee paid by the deal entity to the independent sponsor for ongoing oversight, board service, and p…
Equity Rollover for Dental Practice Management
The portion of seller proceeds reinvested into the post-close entity, aligning seller with buyer.
Earnout Structures for Healthcare Services
roll-up of physician practices and ancillary service lines
Earnout Structures for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
An LOI on the desk, a dental practice management target, and a Earnout Structures question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.