One thing I don't see is the other side of this story: the sellers.

I don't get why sellers are selling to PE. Can these services not "IPO"? Why do these companies need to sell?

When PE takes over medical practices, my understanding is there just isn't enough capital available for a dentist to "cash out". The options are either they find another dentist to buy it, the close the practice, or they sell the private equity...

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skinfaxi 10 hours ago | parent | next [-]

How is local doctor's office going to IPO? An IPO is just selling to the public instead of a private buyer. Not to mention the amount of paperwork and ongoing reporting requirements of actually IPOing.

Talking to a single buyer is easier than arranging an IPO and I would imagine the diligence far less onerous.

	▲	itake 6 hours ago \| parent [-]
		My point is, if not PE, how do people expect boomers to exit from their businesses?

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tw04 10 hours ago | parent | prev | next [-]

Out of the gate you need $27.5m in cash flow with $2.2m in profit. I doubt there are many single practice dentists doing that kind of volume.

You can’t just IPO because you want out of the business. There’s lots of reporting and regulatory requirements to ensure you aren’t screwing investors.

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itake 6 hours ago | parent | next [-]

I don't get for the sellers, what is the alternative? It feels like their only choice is LBO PE deal.

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_DeadFred_ 8 hours ago | parent | prev [-]

In the past farmers needed COOPs in order to make their products/the local community's economy viable. Today we need something like COIVs (community owned investment vehicles). Kiva for the rest of us I guess.

	▲	itake 6 hours ago \| parent [-]
		I'm trying to be generous here... but prisoner's dilemma says the people in a community are probably better to park their money outside of the community in order to protect (and grow) their retirement investments. Yes, it would be better for the community if people chose to invest locally instead of the SnP 500, but running out of money in retirement is a very real fear and the SnP500 is much better/safer for most people than COIVs.

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pizzafeelsright 9 hours ago | parent | prev | next [-]

Successful business owner has revenue of $2-20MM with their owner's "salary" being $200k-4MM which is very respectable.

Owner gets old or want to quit the business and a PE offer of 2-8x Revenue comes in.

Owner making $200k instantly cashes that $4MM check and walks away.

PE takes contracts, guts all the expenses and cuts staff in half, and purchase price is recovered in <2 years.

Suddenly there is only one HVAC or dentist company that can maintain licenses and insurance.

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lizardking 10 hours ago | parent | prev | next [-]

Going the IPO route is not an option for most of the companies being acquired (vets, plumbers, electricians, construction companies, etc.)

	▲	itake 6 hours ago \| parent [-]
		If not PE / LBO, what is the alternative?

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balderdash 10 hours ago | parent | prev | next [-]

why would you think a public traded company behaves any better than a privately owned one?

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itake 6 hours ago | parent [-]

My understanding is people don't like the PE / LBO with a single investor, because it loads the company with debt that it pays back via cutting quality and service offerings.

My assumption is publicly traded company would have access to better financing terms and a diverse set of investors with less "hunger" the financial shenanigans the PE investors have.

	▲	balderdash 4 hours ago \| parent [-]
		Totally agree - but I guess I was getting at is that largest mfg. per the article is a a public company, and the number two is private equity, would we think that there would be a meaningfully different dynamic if they both were public?

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mschuster91 10 hours ago | parent | prev | next [-]

> I don't get why sellers are selling to PE. Can these services not "IPO"? Why do these companies need to sell?

Shifting private ownership to a publicly traded company is an awful lot of paperwork (especially for accounting) and upfront costs, you need to time it properly, you need to find banks willing to cooperate.

In contrast, selling a private company to a PE is a pretty much straightforward transaction.

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pelotron 9 hours ago | parent | prev [-]

I think it's totally appropriate to hold it against them if they knowingly sell out to scumbags. Society used to look down on selling out. We wrote songs about it. But in 2026 it is glorified.

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pizzafeelsright 9 hours ago | parent | next [-]

You're 55, making $400k a year as a HVAC Repair Company, and while you love the business and your kids are in expensive colleges (not taking over the business) you are offered $8MM to sell. Instant retirement. A buy out isn't the same as selling out because people live off of cash and not principal.

	▲	pelotron 4 hours ago \| parent [-]
		At the end of the day it comes down to how much money your principles are worth. People are commenting about dentists and doctors being bought out. Those strike me as the kind of people that can afford retirement without also contributing to the worsening of society.

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itake 6 hours ago | parent | prev [-]

What do you think they should do? Who are they holding out for and for how long can they hold out? Retirement is a financial situation and an age. Do they shutdown the business when they are too old to function as an owner?

My friend's parent's local services company shutdown when they didn't find a buyer. A business limping under interest payments IMHO is better than a complete shutdown.