This year has seen the arrival of three new DSOs ready to stand out from competitors and expand their networks in the U.S.
Here is how what the leaders of these DSOs have shared with Becker's about their plans for growth:
Archway Dental Partners (Danbury, Conn.)
Adam Richichi. CEO: We have been on a responsible growth pattern over the last seven or eight years since I took the helm as CEO back in 2017 of making sure we're making smart partnerships and smart integrations with the right kind of practices, not just going out to buy and integrate just to buy and integrate. That means we don't grow as fast as some of our peers, but we make smart decisions and we make sure that if we're going to add a practice to our portfolio, that means we are going to add value to them and they're going to add value to us. If we can't do those two things, we don't do it. So yes, we've been able to identify great partner and affiliate practices across both general dentistry and specialty care over the years. Over the last year, I'd say we've probably been the most acquisitive. We've acquired five practices so far this year with a good seven to 10 ahead of us in our pipeline ... We take great pride in how we go through that integration process, which slows us down appropriately, as it should.
We do really well at driving organic growth in the practice because of our specialty care model, our ability to drive patient traffic in a healthy way and our ability to be collaborative with our dentists to focus on their careers and their individual practices. So our organic growth mission is really powerful. The second part of it is being acquisitive and still partnering and acquiring practices. We don't have a goal on dollars to acquire or the number of practices to integrate. Wherever we can continue to add value and find that quality practice, we'll continue to do so. We are the largest provider of care in the state of Connecticut. I'd like that to be true for Massachusetts as well. I'd like us to be the good guy DSO throughout New England because that's what we always have been in the state of Connecticut. So that will bring our growth ambitions to follow suit.
Cliff Ridge Specialty Partners (San Francisco)
Will MacInnis. Co-CEO: We're trying to be a little bit more focused in the way that we are growing and scaling. Our goal is to build regional density in a small number of markets for the next six to 18 months. So Seattle will of course be a core market of ours. We'll probably pick one or two more core markets that we'll look to design partnerships in, and I would expect that hopefully by the end of the summer, we should have one or two more additional announcements to be made.
[De novos] would be the second leg of the growth strategy, so that is definitely going to be a core part of what we're doing. I think out of the gate, just getting our legs under us, acquisition just makes a little bit more sense to get the platform from what we like to call zero to one. In the background, we're building out a de novo playbook that we're excited to deploy. There are a lot of things we like about the de novo opportunity in some of the markets we're looking at. I would say probably not this year, but next year that will become a part of the story.
Ananya Shah. Co-CEO: Our deals generally look very similar to partnerships with doctors. So they are strong and big owners of the clinic, which has been great for us in this initial deal and we'll continue to do it. It just aligns incentives and helps us out and I think that is the structure we really like. The second thing is generally we are pretty selective with who we buy. We've had a ton of conversations and are going to continue being selective. To that end, we're not slowing anything down. We're excited to go full steam ahead. We will be selective and we will structure deals with good partners that are excited to grow.
REV One Dental (Dallas)
Brady Frank, DDS. CEO: The big word is alignment. These doctors have chosen to be leaders and a lot of our acquisitions and growth will be related to recruiting new dentist partners in a DSO that is not backed by private equity but instead backed by our own fund, which is 100% funded by dentists, so the financing source is also a fund made up of dentist investors, which is probably the most unique part of the DSO. Most DSOs are private equity-backed or blue chip-backed. This is backed by a fund that is funded by actual clinical dentists.
For the remainder of the year, we're going to focus mainly in the eastern U.S. with high-producing general dentistry practices and then next year [we'll] expand the footprint throughout the U.S.