You might be wondering how a DSO deal actually looks for you …

So let’s talk DSO deal structure!

There are two kinds of purchase transactions when buying a business …

One is an asset purchase where the buyer buys all the assets, the other is a stock purchase where the buyer buys all the existing stock (or membership units of an LLC).

Almost all DSO transactions are purchasing assets.

The reasons for this have to do with risk and benefit to the DSO (something I talk about in my book - {link}).

The consideration you receive in a transaction with a DSO typically falls into a combination of five buckets …

• Cash (paid at closing)
• Deferred Cash (cash in a hold back for some defined period)
• Rollover Equity in your own practice and/or in the DSO holding company
• Debt (a note payable to you overtime)
• A contingent earn-out provision that provides for the payment of additional cash consideration if certain benchmarks are achieved.

Every buyer tries to strike the optimal balance between value and risk. So how they chose to structure the deal through those categories is an assessment of the value and the risk.

In the next few weeks, I’m going to share a little bit on each of these categories.

You can also read all about it in my book - “Everything DSO”

Click here to check it out - {link}