> Is the theory here that the previous owners were altruistically pricing below what the market would bear?

As someone who has done research on pricing in a range of sectors, it’s usually some form of ignorance rather than altruism.

In case you think I’m just picking on child care providers, I will provide an additional example — non-VC SaaS services were often wildly mispriced/underpriced until the “charge more” mantra became more widespread (thank you, patio11).