Orthodontic Practice Valuation (2025 Update)
Updated November 2025
Orthodontic practices remain one of the most stable assets in healthcare M&A. The specialty benefits
from predictable cash flow, a largely private-pay base, and expanding consolidation by dental service
organizations (DSOs) seeking recurring patient relationships. Even amid higher borrowing costs and
regulatory volatility, buyer competition and disciplined platform formation have sustained elevated valuations.
Key takeaways:
Platform orthodontic groups commonly trade between 9–11× EBITDA and 1.4–1.8× revenue, consistent with 2025 DSO benchmarks.
Add-on practices typically achieve 5–8× EBITDA, reflecting integration potential and limited infrastructure.
Private-pay revenue mix >70% continues to attract private equity and family-office investors seeking margin protection.
Deal activity increased 9% YTD, led by PE-backed DSOs such as Dental365 and Specialized Dental Partners.
Orthodontic platforms now represent roughly one-third of all dental M&A, signaling durable consolidation momentum into 2026.
Market Overview 2025
According to reports, overall healthcare-services deal volume rose 6% quarter-over-quarter, with physician and
dental group transactions driving 24% of all M&A. Dental and orthodontic practices led that category: nine of the
most active acquirers were DSOs, and all but one was PE-backed. Data shows private equity accounted for 41% of
all U.S. healthcare deals, with physician and dental assets commanding a disproportionate share of disclosed valuations.
Bain’s 2025 Global Healthcare Private Equity Report reinforces the trend: mid-market sponsors continue to outperform
larger funds through specialization. In healthcare, a significant portion of PE activity has involved provider-service
roll-ups. Dental, eye care, and behavioral health remain the most consistently traded subsectors, delivering predictable
exits despite macro uncertainty.
In this context, orthodontic practices strike an ideal balance between scalability and defensible economics. Recurring
treatment revenue, minimal reimbursement risk, and strong ancillary economics (imaging, aligners, in-house labs) support
above-median multiples even as broader healthcare EBITDA averages have plateaued around 11.5×.
| Deal Type | EV/EBITDA Multiple (Typical) | Revenue Multiple (Typical) | Key Drivers |
|---|---|---|---|
| Platform (≥ 5 locations or $3M EBITDA plus) | 9 – 11× | 1.4 – 1.8× | Scale, regional density, management infrastructure |
| Add-on (1 – 4 locations or $1-3M EBITDA) | 5 – 8× | 1.0 – 1.3× | Integration synergies, local referral base |
| Solo practice | 4 – 6× | ~ 1.0× | Owner dependence, limited systems |
| Ortho + Pedo hybrid | 9 – 12× | 1.5 – 1.9× | Cross-referrals, broader demographics served |
Actual pricing varies with each transaction based on many factors. Intended for educational purposes only and not a guarantee of any outcome.
Valuation Drivers and Premium Factors
Even within standard ranges, valuation dispersion has widened as investors reward technology adoption and operational maturity.
Technology enablement
Widespread adoption of digital scanners, 3D imaging, and AI-assisted treatment planning has shortened case-start cycles
and improved throughput. Practices with integrated aligner production or in-house labs can see a 1–2× EBITDA lift
relative to peers.
Recurring revenue mix
Subscription-based aligner programs and long-term treatment plans have become favored models for EBITDA stability.
Buyers value predictable cash flow more than case volume growth.
Infrastructure and back-office systems
Centralized revenue cycle management and patient-communication platforms reduce integration risk.
Private-pay dominance
Practices with >75% private-pay revenue or transparent financing arrangements consistently achieve premium outcomes
versus insurance-heavy models.
Succession and leadership
Retained clinical leadership is essential for sponsor interest; longer transition plans, a deeper provider bench,
and partnership are highly attractive to investors.
Private Equity Landscape and Platform Formation
Levin Associates reports that in Q3 2025 alone, DSOs accounted for 67 transactions within the “physician-group”
category, which represents roughly one-third of total healthcare services deals. Dental365, Specialized Dental Partners,
Imagen Dental Partners, and SALT Dental Partners each completed three to four acquisitions during the quarter,
demonstrating continued momentum at a time when many other healthcare verticals were slowing.
PitchBook’s Q2 update similarly found that “all the -ologies have stabilized,” with dentistry and orthodontics among
the few specialties still commanding premium valuations as top-tier assets. Bain’s analysis of exit strategies shows
that platforms with EBITDA between $10 to $25 million remain the most tradable due to manageable debt loads and strong
add-on pipelines.
Although interest rates remain high, data show that private firms still comprise 72% of all acquirers in healthcare
and announced 222 deals with financial sponsors, up 13% from the prior quarter.
| Year | Orthodontic / Dental PE Deals | Median EBITDA Multiple | Notable Trend |
|---|---|---|---|
| 2022 | 63 | 8.2× | Post-pandemic rebound driven by hygiene volume growth |
| 2023 | 58 | 8.5× | Hybrid models (Ortho + Pedo) gain traction |
| 2024 | 60 | 8.8× | Shift toward tech-enabled treatment platforms |
| 2025 YTD | 54 | 9.0× | PE roll-ups sustain valuations despite rate pressures |
Actual pricing varies with each transaction based on many factors. Intended for educational purposes only and not a guarantee of any outcome.
Margins and Financial Profile
Orthodontic practices exhibit healthy margin consistency relative to other outpatient specialties. VMG Health’s 2025
report places average EBITDA margins between 22% and 26% and same-store growth around 4–6% annually, driven by aligner
volume and marketing automation.
| Metric | Typical Range | Commentary |
|---|---|---|
| EBITDA Margin | 22–26% | Stable due to fixed staff leverage and recurring patient plans |
| Same-Store Growth | 3–7% | Marketing automation and referral programs |
| De Novo Ramp Time | 12–18 mo | Longer in dense metros; faster in underserved regions |
| Private-Pay Mix | 70–85% | Core valuation driver across all models |
| Average Deal Size | $15–35 M | Typical for regional multi-site practices |
Labor cost inflation and interest rates remain pressures, but price elasticity in orthodontic services is high relative
to medical segments. Scope Research data show that size-to-multiple relationships flatten above $10 million in EBITDA,
indicating that buyers value efficiency and growth narrative as much as scale.
Regulatory and Macroeconomic Context
Policy changes through the 2025 One Big Beautiful Bill Act have created uncertainty for Medicaid-exposed segments, but
orthodontics has minimal dependence on government reimbursement. This insulation supports valuation stability while
other provider verticals face margin compression. Furthermore, research notes that the U.S. Federal Reserve’s rate hold
in mid-2025 helped restore deal confidence by signaling a plateau in borrowing costs.
State-level oversight of PE-owned healthcare assets has intensified (Oregon’s SB 95 and similar bills in Washington and
Massachusetts), but dental transactions remain largely outside the hospital and payer scrutiny zone. This regulatory
clarity is another factor sustaining investor interest.
2026–2027 Outlook
Forecasts show steady transaction momentum through mid-2026 as platforms pursue geographic expansion and ancillary
integration. In addition, exit-value analysis suggests multiples will likely plateau near current levels before rising
slightly once rate cuts take effect. For orthodontics, the key themes are expected to include:
Digital workflow optimization
Expansion of AI-driven case planning and chair-time efficiency software.
Vertical integration
Investment in imaging centers and in-office manufacturing to capture margin upstream.
Hybrid ownership models
Continued use of clinician rollover equity to align interests and retain leadership.
Regional fragmentation opportunities
Midwestern and Southeastern U.S. remain under-consolidated, offering attractive entry valuations.
While EBITDA multiples for large platforms may not expand materially, smaller regional operators could see compression
as capital shifts toward strategic buy-and-build plays. Still, Orthodontics is poised to remain one of the top three
most active healthcare services subsectors through 2027.
Learn More
FOCUS Investment Banking specializes in maximizing transaction value for healthcare practice owners through our proven
quarterback approach to M&A advisory.
If you’d like to learn more about our healthcare investment banking services, you can reach out here.
Sources
Prior to joining FOCUS, Mr. Snyder served as Managing Director and Physicians First, a boutique investment banking firm located in Nashville, TN. He completed a variety of healthcare transactions, many with private equity firms and PE-backed companies. In this role, he was responsible for business development and deal execution. His past clients include leading physician groups, healthcare facilities, and institutional healthcare investors.
Mr. Snyder began his healthcare career at Covenant Physician Partners (previously Covenant Surgical Partners) where he was promoted to Director of Operations. Covenant is a physician services company that acquires and operates ambulatory surgery centers and physician practices. The company also built and operated an outsourced pathology laboratory, an anesthesia business, and revenue cycle management company.
Based in Nashville, Mr. Snyder earned his M.B.A. from Vanderbilt University and his undergraduate degree from The University of Virginia. He is a FINRA licensed investment banker.
