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PRIVATE EQUITY INVESTING
in Dental-Related Companies
June 6, 2019 @ 8:00 am - 5:00 pm
Why PE Investors Deem
Of Dental Services Companies
To Be Endless
Private Equity Investing in Dental-Related Companies
Dental service organizations are for-profit companies that manage the back office operations of dentists’ practices. Called DSOs, they provide nuts-and-bolts management expertise for dentists, and they oversee the profitability of day-to-day non-clinical activities.
As of last year, the DSO market amounted to a whopping $73 billion! Despite that giant size, only 7% of all practicing U.S. dentists were affiliated with DSOs in 2017!
So the opportunity for expansion for middle-market private equity firms who buy and build DSO platforms seems endless.
What’s more, the population of dentists is skyrocketing. According to the Bureau of Labor Statistics, it’s projected to grow another 20% before 2026, far faster than the average rate for all occupations in the U.S.
And the growth rate for the DSO industry is expected to be an astonishing 13-to-14% each year through 2024.
Here are six reasons why the growth of the dental services market is so stunning —
- Dentists are transitioning from managing patients’ discomfort and pain and anxiety to providing complex preventive care and cosmetic procedures.
- Patients want to keep their natural teeth, which need to be cared for as opposed to simply being removed.
- Dentists and oral surgeons are using more sophisticated techniques for repairing and replacing teeth.
- Dentists are requiring state-of-the-art modern equipment like digital x-ray systems, infection control equipment, and intra-oral video cameras.
- Insurance coverage is more widely available, so dentists are required to invest in electronic medical records and billing systems.
- New research shows that people’s oral health is closely linked to their overall health, prompting patients to pay closer attention to dental hygiene.
On the other hand, as competition intensifies in the DSO world, PE investors must —
- Provide and expand incentives to properly leverage their back-office talent
- build robust compliance programs that shift administrative burdens away from the dentist
- understand and comply with complex federal and state and professional regulations, which are not always friendly to PE investors or the DSO concept
The last couple of years have seen a significant number of private equity transactions as investors consolidate dental practices and build mega platforms. For example —
- KKR purchased a majority stake from Ontario Teachers’ Pension Plan in Heartland Dental, the largest DSO in the U.S., operating more than 800 dental clinics in 36 states.
- In 2018, Ares Management and Leonard Green & Partners increased their stake in Aspen Dental Management, based in East Syracuse, New York, which has more than 650 practices.
- Last November, Linden Capital Partners increased its stake in Young Innovations, a global manufacturer and distributor of consumable dental supplies and equipment.
Thursday, June 6
8:00am – 5:00pm
Midtown Manhattan, NY
Register now to gain valuable insights as 20-plus speakers assess the outlook for DSOs at
The Capital Roundtable’s all-day conference
on Private Equity Investing in Dental-Related Companies
The conference takes place on Thursday, June 6, in Midtown New York City.
Three Key Reasons Why You Should Join Us
1. Learn what segments of the dental industry have the best investment prospects for the next 12 months.
2. Hear about the power of new technologies such as 3D printing and how it’s being used to create tools and dental implants; and how lasers used in cleaning procedures improve the efficiency and precision of dental practitioners and ultimately increase profitability.
3. Understand future return prospects, particularly by shrinking the gap between low entry multiples and high exit multiples.
- What is the right level of debt for a dental-related company?
- What are some of the challenges for investors new to the sector?
- At what pace should investors build out the infrastructure around nascent DSOs?
- How can dental-related companies weather a recession and potential rising interest rates?
- How can a DSO build and grow a platform that will be attractive to investors?
- What are some of the most recent technologies investors should invest in or implement in their DSO portfolio companies?
- How can PE investors stay up-to-date on state and local regulations around the dental industry?
- What incentives should investors put in place to attract and retain dentists?
- How viable are public markets as an exit option?
Recent Middle-Market Dental-Related Deals
- In January, Western Dental Services, which is backed by New Mountain Capital, acquired Guardian Life Insurance Co.’s DSO.
- Sentinel Capital Partners bought MB2 Dental Solutions last October.
- Last year, Triton’s small cap team acquired Nordic dental supplier Unident.
- KKR bought 58% of Heartland Dental in 2018 from Ontario Teachers’ Pension Plan.
- New MainStream Capital purchased Cordental Group in March 2017.
- MidOcean Partners bought Affinity Dental Management in June 2017.
And in that same year, MidOcean Partners sold Water Pik, a maker and distributor of oral health products, for a 5x return.
- Gauge Capital acquired Pediatric Dental Providers in April 2017.
- Imperial Capital sold Dental Corp. of Canada, the largest network of dental clinics in Canada, to L Catterton in April 2018.
Karan Garg is a managing director in Houlihan Lokey’s healthcare group. He has 15 years of investment banking and private equity experience. Mr. Garg has closed more than 50 healthcare transactions, including buy side and sell side M & A transactions, as well as private financing and equity raise transactions for public and private companies.
He focuses on a wide range of sectors within healthcare services including dental services and products, physician services, behavioral health and clinical laboratories.
Mr. Garg’s notable recent clients include Simply Beautiful Smiles, Grand Canyon Anesthesia, Elite Dental, Anesthesia Associates of Ann Arbor, Remed, The Orthopaedic Institute, Sentinel Capital (MB2 Dental Solutions), Linden Capital Partners (Smile Doctors), Hill-Rom Holdings, D4C Dental Brands, Altima Dental, Guardian Life Insurance, Gryphon Investors (Smile Brands), North East Dental Management, Absolute Dental, Valley Anesthesiology, RHA Health Services, Interactive Health Solutions, Dental Care Alliance, Deca Dental Group, DentMall, Gentle Dental of New England, ABILITY Network, MedHOK Healthcare Solutions, H.C. Materials, maxIT Healthcare, Calloway Labs, IEE, MWH Global, NextiraOne Group, Celsis, Accumed Home Health, CareFusion Technologies, Select Rehabilitation and SourceOne Healthcare Technologies.
Mr. Garg earned a BS in finance from DePaul University. He is based in the firm’s Chicago office.
This Capital Roundtable conference in midtown, New York City, is all-business, all-targeted, all-designed to be a completely focused day of practical information and revealing insights about education companies. You’ll gain valuable insights from —
- Three informative panel discussions
- Two revealing keynote presentations
- Real-world perspectives from education company investors
- Industry outlooks from noted sector experts
- War stories and lessons learned from experienced hands
- Karan Garg, Managing Director, Houlihan Lokey
- Burt Alimansky, Chairman & CEO, The Capital Roundtable
- Craig Abramowitz, Board Member, Dental Care Alliance LLC
- Marc Aronstein, Management Affiliate, MidOcean Partners LLP
- Sam Banon, Vice President, Gauge Capital
- Michael Chang, Partner, BC Partners LLC
- Dr. Christopher Gayde, Managing Dir.–Healthcare & Life Sciences, Ascendiant Capital Markets LLC
- Michael Fabian, Partner, Sentinel Capital Partners
- Slava Girzhel, Senior Managing Dir. & Head–US Healthcare Investment Banking, Ernst & Young Capital Advisors LLC
- Isaac Hakimi, Founder & President, Streamline Dental Lab
- William Jackson, Chief Operating Officer, Virtual Dental Care Inc.
- Ira C. Kaplan, Partner, Benesch LLP
- Aliya Khaydarova, Principal, Inverness Graham Investments
- Jonathan L. Krieger, Managing Director, Berkery Noyes & Co. LLC
- Jonathan Lewis, Partner, Sheridan Capital Partners
- Ryan MacIntyre, V.P.–Investments, Tenex Capital Management LP
- Lou Marinaccio, Managing Partner, Parkstone Growth Partners LLC
- Andrew Marolda, Managing Director, The Beekman Group
- Robert L. Reisley, Managing Director, Evergreen Industries LLC
- Luke Schroeder, Principal, Gryphon Investors
- Samantha Sharon, Chief Compliance Officer, Benevis LLC
- Kelly J. Skeat, Partner, Benesch LLP
7:30am – 8:30am
Networking & Registration & Breakfast
8:30am – 9:00am
Welcoming Remarks & Audience Self-Introductions
9:00am – 9:30am
Conference Chair’s Introduction —
- Karan Garg, Houlihan Lokey
9:30am – 10:15am
Morning Conversation —
Growth of the Dental Market — Reasons PE Investors See a Bright Future
10:15am – 11:00am
Networking & Coffee
11:00am – 12:00pm
First Panel —
How PE Firms Are Building DSOs for the Future
12:00pm – 12:30pm
Morning Keynote –TBA
12:30pm – 1:30pm
Networking & Luncheon
1:30pm – 2:30pm
Second Panel —
Investing in Dental Products & Lab Companies — Why Investors are Drilling Deeping into the Dental Space
2:30pm – 2:45pm
Networking & Dessert
2:45pm – 3:30pm
Afternoon Conversation —
How DSOs Navigate Compliance & Reimbursement — And Manage Their Administrative & Regulatory Burdens
3:30pm – 4:40pm
Third Panel —
Unlocking Maximum Exit Value — Buy, Build, Consolidate, Exit
Networking & Adjournment
Space at this conference is limited, so register as soon as possible to assure yourself a seat. To avoid disappointment, please contact Chris Agar today to confirm your attendance at 212-832-7300 ext. 0 or email@example.com.
Please note that Capital Roundtable limits the number of registrants from a single firm to three.
Best Rate – Early Registration
Save $300 off the standard fee of $1,495 when you register by Friday, April 19. Just $1,195.
Save $200 of the standard fee! Register by Friday, May 10, and the fee for the conference is $1,295.
$1,495 increasing to $1,595 day of conference, space permitting.
$1095 each, when you register two or more people to attend from the same company.
You can pay by credit card (using the links above or below) or by check. Mail your check and business card to: New York Business Roundtable Inc., 747 Third Avenue, Suite 200, New York, NY 10017.
Can’t attend but want to hear the program? You can buy the audio package along with the handounts.
This event is sponsored by:
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