Ares Management Acquires Aspen Dental: Private Equity Dental Roll-Up Strategy Launches Industry Consolidation

Private equity firm Ares Management acquired Aspen Dental in 2006, launching an aggressive roll-up strategy that would help consolidate the fragmented dental industry and establish the template for private equity’s systematic monopolization of healthcare sectors including dental, veterinary, dermatology, and ophthalmology. The Aspen Dental model—using serial acquisitions and debt extraction to build market power while maintaining the illusion of independent local practices—would be replicated across healthcare specialties over the following two decades.

The 2006 Ares acquisition began Aspen Dental’s transformation from a regional dental service organization into the second-largest DSO in the United States with over 1,000 locations in 46 states and 15,000 employees. The private equity ownership structure enabled aggressive expansion through leveraged acquisitions, with debt loaded onto the operating company while private equity owners extracted profits through dividends and management fees.

Aspen Dental changed hands among private equity firms multiple times, with each transaction increasing leverage and extraction:

• 2006: Ares Management acquired Aspen Dental (undisclosed amount)
• 2010: Leonard Green & Partners purchased Aspen from Ares for approximately $500 million
• Subsequent: American Securities acquired 20% stake while Leonard Green and Ares retained majority
• Current: Majority owned by Leonard Green & Partners (80%) and Ares Management, with 20% held by American Securities and management

During Leonard Green’s, Ares’, and American Securities’ ownership, Aspen Dental extracted at least $1.1 billion in debt-funded dividends since 2012—profits paid to private equity owners by loading the operating company with debt. Simultaneously, Aspen paid at least $1.7 million in settlements with state attorneys general in Pennsylvania, Massachusetts, New York, and Indiana for deceptive practices that harmed patients.

The pattern of private equity ownership producing both massive profits for investors and consumer harm through deceptive practices illustrates the incentive problems created by leveraged buyouts in healthcare. Private equity owners have fiduciary duties to maximize returns for limited partners, creating pressure to maximize revenue extraction even through practices that harm patients or violate consumer protection laws. Settlement costs of $1.7 million are trivial compared to $1.1 billion in extracted dividends, making consumer protection fines merely a cost of doing business.

The dental industry became an especially attractive target for private equity consolidation because it comprises thousands of independent practices offering opportunities for roll-up strategies. Between 2011-2019, private equity firms acquired $4.4 billion worth of dental practices. By 2021, 27 of the top 30 dental service organizations were run by private equity firms. In 2024, the dental industry witnessed 161 private equity deals—the highest number of any healthcare industry.

The private equity dental roll-up strategy typically involves:

1. Acquiring independent dental practices, often keeping original practice names to hide corporate ownership
2. Consolidating back-office functions, supplies, and billing to reduce costs
3. Implementing aggressive revenue maximization protocols pressuring dentists to recommend more treatments
4. Reducing dentist autonomy and clinical decision-making authority
5. Replacing experienced dentists with lower-cost recent graduates or mid-level providers
6. Loading the consolidated entity with debt to fund dividends to private equity owners
7. Eventually selling to another private equity firm or taking public, extracting additional profits

Patients and dentists report negative impacts from private equity ownership including pressure to accept unnecessary treatments, reduced time per patient, emphasis on revenue over quality, loss of dentist autonomy, and higher out-of-pocket costs. Academic studies have found that private equity ownership of dental practices correlates with increased procedures, higher costs, and more aggressive treatment recommendations.

The Aspen Dental model was replicated across healthcare sectors:

• Veterinary: National Veterinary Associates, Compassion-First Pet Hospitals, and others have consolidated 30-50% of veterinary practices under corporate ownership
• Dermatology: Private equity firms have systematically acquired dermatology practices, with studies showing $71 higher costs per medical claim after takeover
• Ophthalmology: Similar consolidation patterns with increased costs and reduced competition
• Emergency medicine, anesthesiology, radiology: Private equity has acquired practices and staffing companies, enabling surprise billing and price increases

The systematic nature of private equity roll-up strategies across healthcare sectors represents a fundamental challenge for antitrust enforcement. Traditional merger review examines individual transactions, often missing the cumulative effect of serial small acquisitions that collectively build monopoly power. By the time regulators recognize the pattern, private equity firms have already achieved dominant market positions difficult to unwind.

Consumer protection challenges are equally severe. Private equity-owned healthcare providers often maintain original practice names and branding, hiding corporate ownership from patients who believe they patronize independent local providers. This deception prevents consumers from making informed choices and obscures the connection between private equity ownership and degraded care quality or deceptive practices.

The Aspen Dental case illustrates the need for antitrust reform including lower merger reporting thresholds to capture serial small acquisitions, broader market definition that considers cumulative effects of roll-up strategies, and stronger penalties for consumer protection violations that actually deter rather than merely pricing in misconduct as a cost of business.