DRAI

DRAI is a diligence firm operating exclusively in dental M&A. We built the Operational QoE™, the missing due diligence layer PE-backed platforms and doctor-owned DSOs use to de-risk their acquisitions, maximize post-close outcomes, increase same-store growth across their existing locations, and drive multiple expansion at exit.

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We take on two to three groups a quarter.

The Operational QoE

Most practices can see how they're performing; their dashboards show plenty of metrics. But nobody's diagnosing why dormant revenue assets sit uncaptured in the PMS, quantifying what they represent in recoverable revenue, and documenting it in an institutional-grade format that holds up in the data room.

That's the gap DRAI was built around. We go into the PMS, identify where revenue is leaking and why, and produce a forensic diagnostic that quantifies it and maps the recovery path. As an independent third party, we have no stake in the outcome, hence giving the report its weight and credibility in the room.

Acquirers, owners, and the advisors around them retain us to establish the revenue a target is not capturing from the patients it already holds, and to document it to the standard a deal team requires, so that an acquirer underwrites and plans on that figure and a seller either captures it before listing or documents it so that the gaps/weaknesses cannot be discounted at the table.

“I came across one of your posts on LinkedIn that was resonating with some frustrations of mine, a perceived gap in the DSO space, when it comes to gathering appropriate operational detail in the small window of time that we have to do so, and kind of missing what is captured in the financial QoE. As I was reading through your thing, I was like, oh man, this is gospel. This is exactly how I feel and what I wish we had here at my DSO.”Founder and CEO of a 50+ location PE-backed DSO in the South

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See the four sample reports

Engagements

Our clients commission the Operational QoE across the group's full lifecycle: Acquisition Diligence on what you acquire, a Portfolio Review of your existing locations, and Pre-Listing then Going-to-Market engagements when you exit or transact with your next sponsor.

Acquisition DiligenceKnow how much opportunity sits in your target acquisition, in recoverable EBITDA, at a conservative rate and a moderate rate. Give your deal team better data to underwrite on and the confidence to take it to your sponsor and lenders. Give your operations team the pre-identified growth opportunities so they build a target-specific value creation and integration plan before close and hit the ground running from Day 1, compressing time-to-IRR on every deal. → Read more

Portfolio ReviewIdentify the untapped opportunities within your existing locations. Arm your CFO with defensible data to underwrite organic growth against, present your board with evidence the value creation plan holds, and bring your operations team clarity on which margin expansion levers to work first. Accelerate EBITDA across the hold period, lift same-store growth and borrowing capacity for more aggressive inorganic expansion, and prove a strong operating model the next sponsor pays a higher multiple for. → Read more

Pre-Listing12-24 months before sale, measure what your locations are leaving uncollected from their own patient base and what it is worth in recoverable EBITDA. Give your CFO the trailing EBITDA trajectory to the listing date, so the DSO lists when trailing EBITDA peaks rather than when the sponsor's hold period expires, map the recovery path for your operations team to capture it before listing, and go to market on a higher trailing EBITDA. → Read more

Going to MarketAt or near LOI, anchor earn-outs to documented assets that already exist rather than betting on future growth targets that may not materialize. Control and strengthen the narrative by forensically documenting the areas of opportunity proactively, so that the acquirer cannot discount the gaps at the table. Avoid re-trades, protect your valuation, and structure defensible deal terms. → Read more

→ All engagements

Who we work with

Sponsor-backed platforms

Expanding with sponsor capital, a buy thesis and a value-creation plan to defend across every deal, and a sponsor exit on the horizon.

→ Platforms

Doctor-owned groups

Acquiring on your own balance sheet and exiting in the near future to an institutional buyer.

→ Owners

Advisors and lenders

Brokers, attorneys, lenders, bankers, and financial QoE firms who commission the document alongside their own work, or refer it.

→ Advisors

Our thesis

The dental roll-up was built on multiple expansion. You bought at 5x, exited at 12x, and the spread was the return, which meant operational variance at each tuck-in didn't have to be amazing. That spread is gone. PE firms now hold dental assets six years and longer, and over the past two years more than 40 DSOs went to market and fewer than 10 closed.

When the multiple no longer carries the return, the return has to come from running the practice better than the seller did. And you cannot capture operational alpha you never documented.

That's the thesis behind DRAI and its Operational QoE.

→ Full article

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