- October 6, 2026
- Posted by: Ken Dichi
- Category: Uncategorized
In the years after we started opening locations with evening hours, weekend availability, and in-network insurance options, I began receiving letters from other dentists asking us to stop. A few of them went far enough that I think they raised real legal questions, because competitors coordinating to pressure another business into limiting how it operates is exactly the kind of thing antitrust law exists to prevent. I remember being genuinely surprised that anyone would put that in writing. What I understood later is that those letters were the clearest signal we had that we were doing something different enough to threaten the way things had always worked.
At the time, that way of working was the overwhelming norm. In 2005, roughly 85 percent of dentists owned their practices, according to the ADA Health Policy Institute, and in the early 2000s about two out of every three were practicing solo. The independent office with one dentist and one front desk was less a business model than an assumption.
That assumption has been eroding steadily ever since. Practice ownership fell to 73 percent by 2023, and by 2024 only about one in three dentists were practicing in a single location with no other dentist. The share of dentists affiliated with a dental service organization has more than doubled in under a decade, rising from 7.2 percent in 2015 to 16.1 percent in 2024.
Triangle Family Dentistry and Carolina Orthodontics and Children’s Dentistry exited to Lightwave Dental in December 2019, when that number was closer to 10 percent.
I did not cause the shift and I was not the first to see it coming, but we did exit into the beginning of the acceleration rather than after it, and the difference between those two timings is worth more than most operators realize.
Leadership and Platform
When private equity evaluates a healthcare business, it is looking for two things above everything else, and if you do not have both you will not attract serious capital at a serious price.
The first is leadership. The second is platform, and platform is a word used loosely enough that it has almost lost its meaning. A platform is unified leadership, unified investment strategy, unified banking, unified insurance, and unified marketing. It is a single organism with consistent systems running across every location rather than a collection of similar businesses that happen to share a name. That distinction is what separates a company worth a premium from a company worth a discount, because the first kind can absorb a new location without breaking and the second kind cannot.
Healthcare is attractive to private equity for a reason that has very little to do with clinical outcomes and almost everything to do with human behavior: patients are sticky. If you have a good doctor and nothing has gone wrong, you stay. You do not want to fill out new health history forms, you do not want to explain your history again, and you do not particularly want to find out whether the next office is any better. That retention creates durable, predictable revenue, and predictable revenue is what private equity pays a premium for.
That is also why certain sectors are drawing capital right now while others are not. Veterinary care, psychiatry, mental health, and dental are where the money has moved, largely because those fields are less dependent on Medicaid and on capitated insurance plans, which pay a provider a fixed amount per patient per month regardless of how much care that patient actually ends up needing. When a large share of a practice’s revenue depends on a rate that a legislature or an insurer can change, a single policy decision can wipe out the practice’s earnings overnight, and no buyer wants to take on that kind of exposure. I wrote a while back about the first time I encountered the term EBITDA and had no idea what it meant, and this is one of those places where the concept does real work: buyers are paying a multiple of what a business earns, so anything that puts those earnings at risk directly reduces what someone is willing to pay.
Sell When You Are Doing Well
The single biggest mistake I see operators make is waiting too long.
The instinct is understandable, because the business is performing and there is always another year of growth ahead, and selling can feel like something you do once you have run out of room. What actually happens is that performance eventually softens, and by the time an operator decides to go to market their earnings are declining, the price a buyer will pay has come down with them, and the buyer across the table has leverage that did not exist two years earlier.
The right time to exit is when performance is strong, the platform is demonstrably unified, and you have options. Options are the entire game, because when multiple buyers are competing for what you built you can negotiate from strength and you can walk away from a deal that does not meet your terms, and the willingness to walk is itself a signal to buyers that what you have is genuinely valuable.
When we went to market, we had enough interest that we could afford to say no, and that is the only reason the next part of this story happened the way it did.
What We Chose and Why
We did not take the highest offer.
Dr. Jonathan Boes and I had built those practices with a group of doctors who had spent years in those chairs, in those buildings, with those patients, and we wanted a structure that would let them own equity in the offices where they actually worked. Only one buyer would agree to that, and that is the buyer we went with.
There was a second condition that received far less attention at the time and turned out to matter enormously. We wanted to retain operational control, specifically so that capital coming out of the transaction could be directed toward real estate rather than back into dental operations. That decision is the reason the real estate portfolio kept compounding through the entire period following the exit, and it is the single most consequential term in the deal that nobody ever asks us about.
The Partner Matters More Than the Model
The question I get asked most often, usually by doctors somewhere in the middle of their own decision, is whether private equity belongs in healthcare at all.
The honest answer is that it depends almost entirely on the partner, in the same way that there are good and bad operators in every field.
Good private equity balances financial performance against patient outcomes and invests in the people and systems that make a platform sustainable. Lightwave was a good private equity match for us. They listened to a growth formula that was already working and put capital behind amplifying it rather than arriving with a cost-cutting playbook and applying it to a business they had just met. The practices have continued to expand since the exit and now operate across 23 locations in North Carolina and South Carolina. That growth is continuing. As Chief De Novo Officer at Lightwave, I oversee our de novo strategy, which means building new practices from the ground up rather than acquiring existing ones, and we are slated to open five to six of them a year for the foreseeable future.
Bad private equity optimizes for the numbers at the expense of the patients and eventually destroys the value it was trying to capture, and the fields where that has caused the most visible damage tend to share one of two characteristics. Either the reimbursement structure creates real pressure to cut clinical quality in pursuit of margin, or consolidation happened so quickly that the operational infrastructure could not keep pace with the growth. Emergency medicine staffing is the example most people point to, and for good reason.
There is a deeper philosophical question underneath all of this about whether healthcare should be a for-profit enterprise at all. Canada answers that question very differently than we do, with a publicly funded single-payer system covering most physician and hospital care, while the American system runs on a mix of private insurance, employer-sponsored coverage, and public programs, with for-profit entities operating at nearly every point in the chain. Reasonable people disagree about which approach serves patients better, and that debate is well beyond what I can settle here. Within the American model, though, the operator matters far more than the asset class, and a partner with the right values can make care more accessible and more efficient while the wrong one does precisely the opposite.
Build the Platform Either Way
What I would tell any operator thinking about this is that the work of building a real platform is worth doing whether or not you ever sell.
Unified systems, documented processes, clear leadership, and consistent performance across locations are what make a business valuable to a buyer, and they are also what make a business survivable without you in the room every day. If you never go to market, you have built something that runs. If you do go to market, you have built something that commands a premium and gives you the leverage to choose your partner rather than accept whoever shows up.
The consolidation happening in dentistry is not going to reverse. Among dentists up to 10 years out of dental school, 27 percent are already affiliated with a dental service organization, compared with 9 percent of those more than 25 years out. In North Carolina, the overall affiliation rate climbed from 12 percent in 2022 to 17 percent in 2024. The generation entering the field now is making a fundamentally different set of assumptions about ownership than the generation I came up with.
That shift will keep moving whether any individual operator likes it or not, and the only real question worth asking is whether you have built something strong enough to give yourself a choice about how you participate in it.
About Dr. Hesham A. Baky
Dr. Hesham A. Baky is the Founder and Chairman of AB&B Commercial Real Estate and Vantico Investments, and a co-founder of Triangle Family Dentistry and Carolina Orthodontics & Children’s Dentistry. Since launching his first practice in 2009, he has helped scale a vertically integrated platform spanning healthcare operations, commercial real estate, and private investment. Dr. Baky regularly speaks on leadership, systems-driven growth, and operator-led investment strategy.
To inquire about speaking engagements or to connect, please contact marketing@abbcre.com.
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