North Arrow ABA Sidesteps PE, Creates Employee-Owners Through Stock Ownership Program

Mike Dow, an operator who chose the road less traveled

TRAVERSE CITY, MICHIGAN — In 2018, Mike Dow did what most operators in applied behavior analysis eventually do. As CEO, he led the sale of Autism Centers of Michigan to a private-equity-backed platform. This month he is closing a different kind of deal.

On June 26, North Arrow ABA, the Northern Michigan provider where Dow is the Executive Director, finished selling itself to its own employees to become an employee stock ownership plan (ESOP). The buyer is not a fund. It is the roughly 200 people who work there, and makes North Arrow one of only a few ESOPs built purely around ABA services in the country.

North Arrow was founded in 2020 by Jonathan Timm, a board-certified behavior analyst (BCBA) who had left a private-equity-backed provider to start his own practice. Dow joined him not long after. From early on, Dow said, the two structured the company to end up in employee hands, formalizing a profit sharing program and giving staff a voice in strategy well before the ESOP paperwork.

Dow is not a clinician. He studied engineering at the University of Virginia, trained at Harvard Business School, and spent 25 years in consulting, technology, and government work before spending the last decade in autism care (and in a side career as an author, writing the award-winning science fiction trilogy, Dark Matters). What he brought to North Arrow was a feel for how ABA companies get built and sold, learned by having done it himself.

An ESOP in a category built for rollups

North Arrow is choosing employee ownership at the moment private capital has never been more interested in ABA. A study published in JAMA Pediatrics in early 2026 by researchers at Brown University, led by health economist Yashaswini Singh, counted 574 autism therapy centers under private-equity ownership across 42 states as of 2024. Nearly 80% of those acquisitions fell in the four years from 2018 to 2022. California and Texas alone accounted for 178 centers.

The economics explain the interest. ABA platforms have changed hands at roughly 12 to 15 times EBITDA, the standard earnings measure used to price deals, according to FOCUS Investment Banking, and operators familiar to anyone in the field, including BlueSprig, Hopebridge, and Caravel Autism Health, have been built up and traded by successive private-equity sponsors. Dow knows the model from the inside. He built into it, then sold.

“We felt that an ESOP best aligned with our values and emphasis on clinical quality, responsible growth, and local decision-making over scale for the sake of scale.” – Michael Dow, Executive Director, North Arrow ABA (2026)

An ESOP is a different animal. It is a qualified retirement plan that holds company stock in trust for employees, who pay nothing for the stake and accumulate value as the business performs. North Arrow has named Kjersti Cory of SCJ Fiduciary Services as the independent trustee representing employees in the transaction. There is no outside sponsor, no re-inventing the service model after the deal, and no ticking clock pushing the company toward another sale. And best of all, there are typically no federal or state taxes to pay, as ESOPs are exempt under IRS tax rules. This gives ESOPs a significant competitive advantage in their ability to invest in the business, and in their staff.

A Fresh Perspective on the ABA Workforce Crisis

Every ABA operator deals with the daily challenge of hiring and retaining clinical staff. Although the number of BCBAs in the country had grown to about 74,000 by 2024, it hasn’t kept up with demand, as 2024 industry workforce data shows more than 103,000 BCBA job openings. The ESOP ownership model re-directs federal and state tax payments as well as some of the company profits into annual employee stock allocations. The five-year vesting schedule creates a powerful incentive for employees to stay, and to grow with the business. Everyone gets to participate – from BCBAs to Behavior Technicians and administrative staff – meaning that the success of the business gets shared well beyond the investors and the C-Suite.

What North Arrow stands for, and what it doesn’t

By its own account, North Arrow competes on quality rather than size. The company was the first provider in Michigan to earn accreditation from the Autism Commission on Quality (ACQ), the body the Council of Autism Service Providers (CASP) created in 2022 to set organizational standards for ABA. Timm, certified since 2011 and a graduate of Western Michigan University, chairs the quality committee of the Michigan Behavior Analysis Providers Association (MiBAP), the state advocacy group that Dow helped found and initially led as its first President.

What North Arrow does not claim to be is also telling. It does not market itself as the largest provider in the state, the highest-paying, or the most academically credentialed. Its eight clinics sit in small Northern and West Michigan towns, among them Cadillac, Cheboygan, Gaylord, Grayling, and Petoskey, not the metro markets where the national chains concentrate. The case Dow and Timm make is narrower and structural: that tying clinician incentives to client and business outcomes through company ownership produces better results than a model answerable to outside capital.

What the ESOP has to prove

ESOPs are common in construction, engineering, and manufacturing; the National Center for Employee Ownership counts roughly 6,400 ESOPs in the U.S.. They are rare in healthcare services and, by North Arrow’s reckoning, all-but unheard of in pure-play ABA.

Dow’s wider thesis is that ABA is entering a cleanup phase, with consolidation and harder scrutiny of how providers bill, especially through Medicaid, and that more owner-operators with a clinical center of gravity would steady the field. His aim is a sweet spot where strong client outcomes and a fair financial return coexist, in a way that benefits all employees. The ESOP is a manifestation of that philosophy.

AT A GLANCE

SOURCES & REFERENCES