12 is the new 5: what Bain's number means for a dental buyer

Bain & Company's 2026 Global Private Equity Report put a number on something dental buyers can already feel yet haven't been able to solve.

They call it 12 is the new 5, because in 2015 you needed 5% annual EBITDA growth to hit a 2.5x return over five years. But today, with borrowing costs at 8 to 9% and compressed leverage, you need 10 to 12%. That changes everything about how you underwrite a dental acquisition.

Let's say a dental practice produces $800K in EBITDA and will close at a 6x multiple for $4.8M. If they do an Operational QoE post-LOI, they may find $300K in dormant revenue from lapsed patients, diagnosed and accepted treatment not yet completed, no-show patterns and cross-location variance. Yet it doesn't appear in the financials. None of it triggered a billing event, never showed up in the financial QoE, and never got factored into your underwriting.

Recovering this dormant revenue doesn't require new staff, equipment, or locations. The fixed cost base is already in place, so most of that $300K flows to EBITDA at 70 to 80% incremental margins. At a 6x multiple, that's $1.25M to $1.44M in enterprise value the buyer is acquiring without even knowing it exists.

If the buyer surfaces this in the first 90 days, EBITDA grows faster than modeled. The exit multiple applies to a higher earnings base, and the fund hits its 2.5x MOIC target in year four instead of year six. That compression means earlier distributions to LPs and faster access to the next fund, even in what Bain calls the most difficult fundraising environment the industry has ever seen.

If it gets discovered in year 2 or 3 though, the model gets revised downward and the hold period drifts. With hold periods already approaching seven years and LP distributions below historical norms, that drift is not a rounding error but a huge fund economics problem.

Bain calls the solution full potential diligence. Their words are that if you understand best what the asset can be worth, you're not only smarter about what to bid for it but you enhance speed to value by hitting the ground running on Day 1 of ownership.

The operational layer inside the PMS is one of the most consistently under-documented revenue levers in dental M&A. It doesn't matter whether you're acquiring a single practice or a twenty-location group, the gap exists in both.

In a world where 12 is the new 5, discovering your operational baseline on Day 1 versus Year 2 is the difference between a deal that performs and a fund that struggles to raise its next vehicle.