INSIGHT

Private Equity Investment in Dental Care
Creating Long Term Value

Within the dental sector, Provident has a reputation for representing leading dental service organizations (DSO). Former client transactions include Great Expressions Dental Centers’ 2008 partnership with Audax Group, Baystate Dentals’ 2013 acquisition by North East Dental Management, Laser Dentistry for Children’s 2015 transaction with Webster Capital, and Children’s Dental Health Associates’ 2016 recapitalization with DFW Capital Partners. While dental has long been one of the most actively consolidated sectors, merger & acquisition activity within the space has continued at a strong pace. Projected to be a $170 billion industry by 2022, a highly favorable macroeconomic backdrop exists for the dental sector. However, the success of a dental services organization is predicated on its ability to invest in a comprehensive infrastructure, recruit dental practitioners, and diversify service lines.

Several large dental service organizations such as Heartland Dental Care, Aspen Dental Management, and Great Expressions Dental Centers, have greatly benefited from the macroeconomic tailwinds driving the sector. Yet, while many large dental consolidators have benefitted, smaller independent dental organizations have not been able to capitalize on the same scale. In an environment of ever increasing margin pressure and competition, the dental community faces significant challenges. Dentists near the age of retirement are reconsidering whether or not they will be able to realize a return on the time and dollars they have invested in their practices’ ahead of retirement. Early career dentists, saddled with student debt, are considering whether it is worth the risk of financially committing the resources to invest in their own private practices’ with consideration to the opportunity cost of seeking stable employment with a large dental practice. Taking these factors into consideration, dental organizations have begun to look for alternative strategies to grow the equity value of their organizations over the long term.

Report Summary
• Private Equity Investment and Industry Consolidation
• Creating Value through Private Equity
• Dental Transaction Environment
• Concluding Thoughts

Provident Dental Team

Ajeya Shekar, Vice President

Abe M’Bodj, Associate

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  • “Provident listened to our story, confirmed that our business was valuable and made us feel like this was the only transaction important to them.”

  • “While the decision to sell our business was a difficult one, Provident vigilantly represented and protected our best interests throughout the transaction.  Provident was the right choice for Cascade and I would recommend their services to anyone.”

  • “We would not have been successful navigating the process without Provident’s hard work and active participation. They exceeded our expectations and we would highly recommend them to any health care company seeking a knowledgeable and engaged investment banking firm.”

  • ”I have a tremendous amount of appreciation and gratitude to the Provident team for their hard work and diligence throughout this process. Each and every member of the Provident team is excellent at their jobs and it has been a pleasure working with such a professional team. Provident has provided outstanding guidance and counsel, and this deal could never have gotten done without Provident’s leadership.”

  • “A lot of investment bankers were interviewed, Provident was chosen. Provident delivered. My clients could not be happier.”

  • “Provident’s depth of experience and practical business savvy was demonstrated in their ability to cut through what sometimes looked like impasse.”

  • “After working with Provident on several transactions, it is evident that their extensive industry knowledge and deal expertise prove to be invaluable to their clients.”