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Shining a light on PE ownership.

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SM

Smile Brands

healthcare
PE-OWNED

Dental practice management company supporting hundreds of dental offices.

PE-OWNED

Acquired by KKR2021-04-12

View PE Firm Profile

What Made It Great

“

Scalable dental practice management and support services

What PE Will Likely Do

Predictions

Reduced staff and less experienced dental professionals to cut labor costs, leading to longer wait times, rushed appointments, and potential declines in quality of care

HIGH LIKELIHOODBased on: KKR's track record of cost-cutting, debt loading, and rapid expansion in acquired companies

Sale-leaseback of dental practice real estate to extract equity, potentially leading to higher rents and facility maintenance issues

HIGH LIKELIHOODBased on: The healthcare industry playbook commonly used by private equity firms, including the tactics of staffing reduction, real estate sale-leasebacks, billing upcoding, and service line cuts

Aggressive billing practices to boost revenue, including upcoding of procedures and diagnoses, resulting in higher out-of-pocket costs for patients

HIGH LIKELIHOODBased on: The negative consumer impact score of 0.36 for KKR's acquisitions, indicating a harmful effect on consumers

Elimination of unprofitable but important services like specialized dental care for low-income or special needs patients

HIGH LIKELIHOODBased on: The negative consumer impact score of 0.36 for KKR's acquisitions, indicating a harmful effect on consumers

Significant management fees charged by KKR, reducing resources available for patient care and practice investments

HIGH LIKELIHOODBased on: The negative consumer impact score of 0.36 for KKR's acquisitions, indicating a harmful effect on consumers

Expected Timeline

Phases
0-6 monthsCompleted

“0 to 6 months months”

Announcement of 'efficiency' initiatives, leadership changes, and optimization plans

6-12 monthsYOU ARE HERE

“6 to 12 months months”

Staffing reductions, service reviews, and the start of real estate transactions

12-24 months

“12 to 24 months months”

Noticeable declines in patient experience, including longer wait times, rushed appointments, and issues with facility maintenance

24-36 months

“24 to 36 months months”

Potential closure of less profitable dental practices, quality scandals, and patient dissatisfaction

36+ months

“36+ months months”

Likelihood of bankruptcy or a fire sale to another operator, further disrupting patient care

Similar Cases

Other companies that followed a similar path after PE acquisition

Operating

Steward Health Care

Cerberus Capital Management·2010

See full case study
Operating

Envision Healthcare

KKR·2018

See full case study
Operating

US Dermatology Partners

Ares Management·2016

See full case study
Operating

Hahnemann University Hospital

Cerberus Capital Management·2018

See full case study
Operating

Sound Physicians

Summit Partners·2019

See full case study

What You Can Do

Take Action

Actions

  • Be vigilant for any changes in the quality of dental services, such as longer wait times, rushed appointments, or issues with facility maintenance

  • Monitor your dental bills for potential upcoding or other billing irregularities, and advocate for transparent and fair pricing

  • Stay informed about any changes to the availability of specialized dental services or the closure of local dental practices

  • Consider switching to a dental provider not affiliated with Smile Brands if the quality of care significantly declines

Alternatives

Non-profit health systemsSAFE

Community-focused healthcare

Kaiser PermanenteSAFE

Integrated managed care consortium

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"Smile Brands is now PE-owned. Here's what that means for you."