Transaction Intelligence • Arizona OD Practice Owners

Private Equity vs. Independent Sale:
The OD Decision Matrix

The most consequential transaction decision for an Arizona OD is not what price to accept — it is who to sell to, and under what structural terms. Lumina Medical Capital has mapped the full decision matrix so that you choose with precision, not assumption.

Intelligence Report — Node 06

The Two Paths: Understanding What You Are Actually Choosing Between

Lumina Medical Capital advises Arizona ODs at the most consequential inflection point in their professional lives — the moment when a practice that has been built over decades becomes a transaction. The first and most important decision in that transaction is buyer selection.

The two primary paths — private equity / DSO acquisition versus independent buyer sale — are not simply different prices. They are different asset classes, different post-close clinical realities, different tax profiles, and different legacy outcomes. The OD who evaluates them exclusively on headline purchase price is comparing instruments by the wrong metric.

This intelligence report provides the framework Lumina uses to guide Arizona ODs through this decision — structured around the six dimensions that actually determine which path produces the superior outcome for a given practice owner's specific objectives.

Decision Architecture

The Six-Dimension Comparison Matrix

Dimension Private Equity / DSO Independent OD Buyer
Purchase Price Multiple
7.0 – 9.5x
Platform premium applied
4.5 – 7.0x
SBA-constrained ceiling
Post-Close Clinical Autonomy
Reduced. Clinical decisions largely preserved; administrative, billing, staffing, hours subject to MSO direction.
Full autonomy transfers to buyer. Seller's post-close role is defined by transition employment agreement only.
Transaction Timeline
90–180 days from LOI to close. DSO diligence is extensive; longer process, more documentation burden.
45–90 days from LOI to close. SBA underwriting adds time; simpler diligence process overall.
Equity Structure
Full cash + rollover equity option (2nd bite potential). May include earnout. Platform equity participation available.
Cash + seller note common. Clean proceeds. No rollover equity. No 2nd bite. Earnout uncommon.
Patient & Staff Continuity
Variable. Platform integration may shift branding, systems, and staffing model within 6–18 months post-close.
Highest continuity. Acquiring OD typically preserves brand, staff, and clinical protocols. Patient attrition lowest.
Tax Efficiency
DSOs often prefer asset sales (unfavorable to seller) but will negotiate stock sale (favorable). Rollover equity defers gains. QSBS potential on retained equity.
Asset sale standard. Installment sale (seller note) spreads gains across years. Favorable for sellers in high-income exit years.
Choose PE / DSO When:

Your practice generates >$1.5M annually and is in a corridor with active DSO acquisition interest (Scottsdale, North Phoenix, East Valley).

You are willing to remain clinical for 2–4 years post-close in exchange for the platform multiple premium and possible second-bite equity event.

Clinical autonomy is not your primary post-close priority and you have confidence in the platform's operational model and culture.

You have a qualified healthcare M&A attorney and CPA engaged who can evaluate and negotiate DSO deal terms with institutional sophistication.

Choose Independent Sale When:

Practice continuity, patient relationships, and staff stability are your highest priorities. An independent OD buyer preserves the clinical culture you built.

You want a clean, final exit with no post-close operational obligations, earnings performance conditions, or platform-imposed clinical protocols.

Your practice revenue is under $1.2M — below the typical DSO minimum acquisition threshold — making an institutional buyer offer structurally unlikely.

Tax efficiency on installment sale proceeds is a priority, or you are in a high-income year where spreading capital gains across multiple tax periods is advantageous.

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Transaction Intelligence

Both Paths Are Available.
Only One Is Right for You.

Lumina Medical Capital does not advocate for a buyer type. We advocate for the Arizona OD. Our practice equity assessment evaluates your specific practice profile, exit timeline, and personal objectives — and delivers a structured recommendation on which path produces the superior outcome, and why.

Initialize Practice Equity Assessment

Complimentary. Confidential. Objective.