2024 2nd and 3rd Quarter DSO Industry Update
The DSO industry is facing unprecedented economic challenges, marked by record-high interest rates, rising labor costs, and increased expenses for supplies and materials, compounded by persistent inflation since mid-2022. Although there are signs of improvement in inflation and interest rates, uncertainty persists, particularly concerning U.S. job reports, upcoming economic data, and the presidential election. This update highlights key areas of interest for the DSO sector.
M&A Update
The consolidation of dentistry, which began around 2010, accelerated rapidly until early 2020. The pandemic then caused a temporary slowdown, but consolidation rebounded strongly in late 2020 and throughout 2021, reaching unprecedented levels. By the end of Q2 2022, however, rising interest rates significantly impacted large transactions. Many large DSOs paused their recapitalization efforts. Some DSOs have managed to secure substantial credit facilities, indicating ongoing confidence in the dental market.