The Ortho Premium
Buyers pay a premium for your referral moat.
Orthodontics has traded 1 to 3 full turns above equivalently sized general dental practices from 2024 through Q2 2026.
In multiple terms: 10x to 14x+ EBITDA. A 20 to 40% premium over general dentistry.
Ask why, and the answer is remarkably consistent.
Sticky, referral-driven revenue. High margins.
That's the thesis. Buyers aren't paying for your chairs or your brand.
They're paying for the reliability of case flow that arrives without you buying it.
Now hold that against what the 2025 practice survey reported.
Referrals from general dentists: down from 2024.
Referrals from parents of existing patients: down from 2024.
The premium is priced on stickiness.
The stickiness is loosening.
I'm not predicting a collapse. Ortho margins are genuinely strong and the specialty deserves a premium.
But understand what you're holding.
A 20 to 40% valuation premium, justified by a moat measurably narrower than it was two years ago, isn't a permanent condition.
It's a window.
And the spread inside the specialty is brutal.
Under $500K EBITDA: 5 to 8x.
Above $5M EBITDA: 12 to 18x.
That's not a gradient. That's a cliff, and scale sits on the right side of it.
So two clocks are running at once. The moat narrowing, and the scale gap widening.
Most owners are watching neither.
If you've had your practice valued recently, was the multiple justified on referrals, on scale, or on something else?
Comments