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MB2 Dental- Anyone consider selling to them?

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  • #16
    Originally posted by RDB View Post

    FYI, Phil is being genuine in his experience. He has been posting in great detail for years on DentalTown.
    I have followed along on DT, congrats Phil! Enjoy your retirement!
    Gotta say, I appreciate you vouching for the long time posts over at Dental Town. This was quite enthusiastic for a first time poster. I’m happy our new poster had a genuinely good experience with his practice transition.

    Phil,

    Welcome to WCI! (Or at least welcome to posting if you’ve been lurking for a while.)

    Comment


    • #17
      Originally posted by wheels View Post
      Read through some of the very long threads on dentaltown and you can get a picture of what MB2 can bring to the table and why many people do or don't agree. My intention was really to get some feedback from people who have directly considered MB2, not to hash out all the DSO emotions and ethical dilemmas. This has all played out on dentaltown, doesn't need to happen again here please.
      Thank you to the person who restored my original post. Much appreciated!
      What I found out on DT is that DSOs elicit a visceral response by many. I went round and round with a bunch of people. It's mostly a waste of effort. If you hate DSOs, I'm certainly ok with that. But there are people that are trying to gain information so they can make educated choices for themselves. For themselves. I think these folks deserve answers, and I'm happy to share my experiences...which with MB2, have been fantastic.

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      • #18
        Originally posted by Hank View Post

        Gotta say, I appreciate you vouching for the long time posts over at Dental Town. This was quite enthusiastic for a first time poster. I’m happy our new poster had a genuinely good experience with his practice transition.

        Phil,

        Welcome to WCI! (Or at least welcome to posting if you’ve been lurking for a while.)
        Thanks Hank. I've done some lurking, and decided it was time to contribute because this is a topic I am able to speak about from personal experience.
        I should add I was emotionally and vocally anti-DSO for many years. As I saw the industry changing, my thoughts on the subject became open enough for me to launch into an investigation into the ins and outs of corporate dentistry. My studies taught me that not all corporate entities operate the same. I found one that was seemingly different. I was shouted down on DentalTown that I was wrong. That I would discover after partnering, I'd see the 'true deal'. Well, I have. And it's been better than what I had expected. I know a lot of people won't be able to swallow this, and I'm ok with that. I just thing we should all be pushing people to do a ton of research before making a choice like this. That's all I've ever advocated for. A lot of people will make a lot of generalized statements not based on their own experience, but based on what they've heard from others. It's fine. We all do some of that. But the idea that all DSOs are similar, and all are bad? That's simply not the case.

        Hey Hank. Is your avatar supposed to be Hank the Tank? If so, that is LOL hysterical.

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        • #19
          Originally posted by Hank View Post

          Gotta say, I appreciate you vouching for the long time posts over at Dental Town. This was quite enthusiastic for a first time poster. I’m happy our new poster had a genuinely good experience with his practice transition.

          Phil,

          Welcome to WCI! (Or at least welcome to posting if you’ve been lurking for a while.)
          there are a few of us here that have known each other on DT for 10-15 yrs or more. In fact, Phil was the friend from my earliest post who referred me to MB2. Didn't know he was here now. Hey Phil

          I spoke to a few DSOs. Can't say any of them seemed different from the rest.
          Every one started their pitch with "We are not a "DSO" DSO".
          Every one said how this is a partnership.
          The pitch was remarkably the same from all.

          I did have a very informative conversation with one guy. We determined pretty early on we weren't a good fit, so he talked to me what a good fit might be.
          What they and all the other DSOs are looking for, is a practice doing $2M or more, in 7 ops or more, with multiple associates, primarily PPO.
          That's what gets the highest valuation. Any deviation from that - the valuation gets nicked.

          To OP, if you do speak to DSOs, make sure you understand the total package. It's nice to get a pile of cash on the closing day - much more important is what happens the day after.. and the month after, and the year after. Clinically, most DSOs seem to want to give you autonomy, which is great. Financially, if you're there for a long haul, it gets much trickier. All DSOs talk about how they expect you to be "the leader of the practice".. which is great, except you're no longer compensated as one. This was a deal breaker for me.

          I had several offers from DSOs and a private buyer that were in 4-6x EBITDA range. The difference was the length of employment - from 6 mos 2x week from private (4x EBITDA), to 1 yr FT/3 yr PT (6x EBITDA). MB2's offer was in the middle. I passed on them all...

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          • #20
            Originally posted by Hank View Post

            Gotta say, I appreciate you vouching for the long time posts over at Dental Town. This was quite enthusiastic for a first time poster. I’m happy our new poster had a genuinely good experience with his practice transition.

            Phil,

            Welcome to WCI! (Or at least welcome to posting if you’ve been lurking for a while.)
            Happy to! Phil’s enthusiasm, in general and for MB2, was the reason I posted. I am saying this not knowing Phil at all (couldn’t pick him out of 2 people). I think because he is very enthusiastic about MB2 (from the details I have read on DT, he has reason to be high on them) his opinion is easily disregarded. To sum up his 100+ page thread on DT…..he got paid more than he would have in a private sale and also feels as if he found a great replacement who is set up well. I have no opinion on the matter.
            On another note, enthusiasm is often pegged negatively on these boards, which is strange

            Comment


            • #21
              I have discussed opportunities with a few DSO’s. It’s better to understand your enemy than your ally. Their end game is the same, increase revenue and sell. If they tell you otherwise, run. As for enthusiasm, their are plenty of HerbalLife representatives with passion and enthusiasm, doesn’t change the fact they are with HerbalLife.

              Here is the typical pitch....

              Pitchman: Hi Dr Dumass, I mean Johnson. Thank you so much for your time today. You can came highly recommended from Dr. Justgotfleeced. He said you are the highest regarded Oral Surgeon in your area, congratulations on a stellar reputation.

              Me: Who said that, he’s never referred a patient to me.

              Pitchman: Really, everyone we have spoke to said you are top notch. Anyway, we will make this brief. There are a bunch more suckers we need to get to today. As you know taxes are going way up, Biden’s plan will probably increase your taxes 2X. Their is massive consolidation in the dental space and we think you would benefit from being our first Oral Surgeon to sell to us. We have a lot of interest, bu5 because of your stellar reputation our partnering dentists have identified you as their preferred surgeon.

              Me: But I’ve never worked with them.

              Pitchman: Like I said, you have a great rep. What we offer is an opportunity to partner with a company who puts you first, we want to be your partner. We want to grow together.

              Me: so like 50/50.

              Pitchman: Not really, we need to buy 100%.

              Me: So I’m now just an employee.

              Pitchman: No you have equity in the corporation. So when it does well, so do you. You continue to run it your way.

              Me: Great, so I control future decisions about the practice.

              Pitchman: No, those are made by the Board.

              Me: Oh, who’s on the board.

              Pitchman: some really smart guys in New York and Chicago, they have tons of experience flipping these companies at huge multiples. They did a bunch of Radiology and ED groups. These guys made a crap ton of money.


              Me: How did the Dr.s do.

              Pitchman: Not sure. It’s mostly PA’s and FMG’s their now.

              Me: So what multiples are we talking about.

              Pitchman: 5-6. But you can invest in “the company” and we expect to sell at 20 EBIDTA.

              Me: Sweet, can I invest all my equity in the company.

              Pitchman: No, just 20%. But good news is that company will likely sell again for 30X.

              Me: Wow, that seems like a lot. Have you seen many sell for 30X.

              Pitchman: There is 3 Trillion dollars on the sideline, of course a dental practice in Omaha will go for 30x.

              Me: it seems like I’m giving up a lot of future income for 2-3 net earnings.

              Pitchman: Have you not heard about the Biden Tax Plan. There are rumors of 90% taxes.

              Me: so what do we do with this lump sum.

              Pitchman: Funny you should ask. I want to connect you to a partner we have. He has a risk free/tax free product that many of our partnering doctors invest in.

              Me: We are screwed,

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