DSO Deal Roundup – May 2021

Our DSO Deal Roundup keeps you up-to-date on the latest DSO deal activity and includes an exclusive synopsis. With no signs of consolidation slowing down, May has been another very busy month in the DSO industry!

May 2021

dentalcorp Announces Pricing of Initial Public Offering and Concurrent Private Placement for Gross Proceeds of Approximately $950 Million
dentalcorp Holdings Ltd. (“dentalcorp” or the “Company”) announced that it has obtained a receipt for its final base PREP prospectus filed with the securities regulatory authorities in each of the provinces and territories of Canada and has entered into an underwriting agreement for its initial public offering of subordinate voting shares (the “Offering”). The Offering consists of a treasury offering of 50,000,000 subordinate voting shares of the Company at a price of $14.00 per subordinate voting share for gross proceeds of approximately $700 million.

Aria Care Partners Expands Dental Care Market Share with Two Strategic Acquisitions
Aria Care Partners provides onsite ancillary medical services for skilled nursing facilities. With more than 20 years of partnership with 2500+ skilled nursing facilities, has acquired Dest Dental Management and Sterling Dental. Dest Dental Management has provided mobile dentistry for nursing homes and skilled nursing facilities throughout North Carolina since 2007. Dest has been a long-term successful clinical partner of Aria Care Partners, making the acquisition a natural next step. Sterling Dental has been in practice for over 20 years, offering best-in-class dental services and insurance across OklahomaKansas, and Missouri. With this acquisition, Aria Care Partners has acquired the Missouri and Kansas operations. The acquisition of both companies is the first of several this year.

USOSM Enters Florida Market, Welcomes WestShore OMS Specialists as its Newest Partner
U.S. Oral Surgery Management (USOSM) – a specialty management services company that exclusively serves oral and maxillofacial surgeons – has announced a new partnership with WestShore OMS Specialists, an oral and maxillofacial surgery (OMS) practice with two locations in southwest Florida, and USOSM’s first official partner in the state. Headquartered in Irving, Texas, USOSM now has partner practices spanning 11 states: Texas, Colorado, Georgia, Tennessee, Minnesota, Alabama, Oklahoma, Louisiana, South Carolina, Mississippi and Florida. They have experienced remarkable growth recently despite the widespread economic disruptions caused by COVID-19. The specialty DSO also recently welcomed Gordon Brady, DMD, and Vincent Montgomery, DMD, to its clinical governance board. Now comprised of 12 surgeons, the board advises USOSM and its partner practices on important clinical issues oral and maxillofacial surgeons encounter. Dr. Brady is a partner and practicing oral surgeon with Atlanta-based Oral Surgery Associates & Dental Implant Centers. Dr. Montgomery is a founding partner and practicing oral surgeon with Oklahoma City-based Oral and Maxillofacial Associates.

Mortenson Dental Partners Raises $12 Million in Equity Offering
Mortenson Dental Partners (MDP) announced that it has completed the private placement of $12 million from the sale of its common stock. The equity raise, available only to MDP doctors and team members, as well as its Employee Stock Ownership Plan (ESOP), adds 30 new investors. Because MDP is a 100% doctor – and employee-owned organization, external investors, including private equity and/or institutional investors, were not eligible for the equity offering. As one of the largest groups of employee-owned dental practices in the country, MDP has no private equity or institutional investors. Doctors and certain nonclinical team members who have made direct capital investments own a majority stake of Mortenson Family Dental Holdings, Inc. d/b/a Mortenson Dental Partners. The remainder is held by MDP’s ESOP, in which team members are automatically enrolled with no action or payment required. MDP makes annual contributions to the ESOP on behalf of the active employees, providing expanded benefits.  They have exceeded their $10 million offering expectations through a 20 percent oversubscription and with participation from 51 investors, at an average investment of $235,000. Funds generated in the equity raise increase access to capital under the company’s recently expanded $90 million revolving credit facility, in which Fifth Third Bank, National Association acted as Joint Lead Arranger, Joint Book Runner and Administrative Agent; JPMorgan Chase Bank, N.A. as Joint Lead Arranger, Joint Book Runner and Syndication Agent; and Trust Bank as Documentation Agent. The credit facility matures in October 2025 and may be used for general corporate purposes, including acquisitions. It also contains an accordion feature to increase total commitments to $130 million.

Diamond Braces Opens New Location in Denville, NJ
With locations in NJ, NY and CT, Diamond Braces’ Denville office is the company’s seventh New Jersey office. Diamond Braces, a Diamond Plus Invisalign Provider, has provided orthodontic care on the East Coast for over 20 years. Diamond Braces has been guided by their AAA principles of affordability, accessibility, and amazing service. Their dedication to digital dentistry has allowed Diamond Braces to serve over 100,000 smiles – at prices 30% less than other providers. Led by Dr. Oleg Drut, Diamond Braces is committed to giving back to their communities. Read more about how they addressed dental care inequities exacerbated by COVID-19 HERE.

North American Dental Group (NADG) Welcomes Jacksonville Affiliate and Added Two Suburban Chicago Dental Practice Locations.
NADG announced its seventh affiliated practice in Jacksonville, Florida welcoming Paul R. Hinder, DDS dental practice in Jacksonville Beach. Dr. Hinder specializes in general and cosmetic dentistry dental implants, sleep disordered breathing and occlusion. He earned his Doctor of Dental Surgery from Creighton University School of Dentistry. Based in Pittsburgh, Pennsylvania, the DSO was co-founded in 2008 by Ken Cooper and Dr. Andrew Matta. They have also just partnered with Affiliated Dental Specialists, adding two suburban Chicago dental practice locations in Gurnee and Vernon Hills focused on pediatric oral and orthodontic care. The founders at Affiliated Dental Specialists – Drs. Gary Klein, David Maddox, and James Orbon – will also take on additional leadership roles within NADG as group founders. Ken Cooper of NADG was named one of the nation’s highest rated CEOs during the pandemic. NADG currently supports more than 250 dental practices and nearly 500 full-time dentists across 15 states. Recently, they saluted women DSO leaders in the industry.

Empire Dental Arts Acquires Palladino DDS, Continues Growth in Northeast Ohio
Headquartered in Mentor, Ohio, Empire Dental Arts was acquired by private equity firm Evolution Capital Partners of Cleveland in January 2020.  Now, they have acquired the dental practice of Palladino DDS & Associates. Based in Mayfield Heights, Ohio, Palladino DDS offers more than 30 years of experience providing customers with dental cleaning, treatments and procedures. With the acquisition of Palladino DDS, Empire’s affiliated network includes nine offices throughout Northeast Ohio. Palladino DDS is Empire’s third investment in the last year. Established in 2017, last fall, Empire purchased practices from Dr. Allan Milewski in Medina and Dr. John T. Webster in Avon.

Alberta’s Align Orthodontics Joins Canadian Orthodontic Partners’ Peer Network
Headquartered in Toronto, Canadian Orthodontic Partners (COP) is the largest orthodontics-focused specialty dental support organization in Canada. It has announced its new partnership with Align Orthodontics‘ clinics in Edmonton and Sherwood Park, Alberta, along with orthodontists Dr. Paul Major, Dr. Karen Hesse, and Dr. Brian Nebbe, as well as their team of clinical professionals.  As a growing network of over 60 orthodontic practices across the country, COP is lead by CEO Anthony Milonas and is continually expanding Canadians’ access to orthodontic treatment.

Consolidation at the Top Continues as Heartland Dental Announces Strategic Transaction with American Dental Partners Incorporated (ADPI) | Group Dentistry Now
Heartland Dental announced that it has signed an agreement to enter into a strategic transaction with American Dental Partners Inc. (ADPI). Based in Wakefield, Massachusetts, ADPI is a DSO that supports 23 dental group practices spanning 278 locations across 21 states. Through the strategic transaction, Heartland Dental and ADPI will have a combined network of over 2,300 supported dentists, in more than 1,400 locations across 38 states nationwide. The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2021. Heartland has entered into a commitment letter (the “Commitment Letter”), dated as of May 12, 2021, with Jefferies Finance LLC, KKR Capital Markets LLC and KKR Corporate Lending LLC (collectively, the “Commitment Parties”), pursuant to which, subject to the terms and conditions set forth therein. Ropes & Gray LLP is acting as legal advisor to Heartland Dental in the transaction. ADPI is being advised by Harris Williams.

Beacon Dental Health Completes Multiple Strategic Affiliations in Boston
Beacon Dental Health, based in Boston, Massachusetts, provides support services to high-potential dental practices in New England. The DSO has announced its affiliations with multiple dental practices in Downtown Boston. The strategic partnerships with Oliver Dental Associates and Downtown Boston Dental, two of Boston’s preeminent practices, mark Beacon Dental Health’s continued expansion into key Northeast markets. The existing clinical and administrative teams will remain at both practices. Beacon Dental Health was co-founded by Rishi Shukla, CEO, and Dr. Frank Schiano, chief clinical officer.

Imagen DPO® Adds New Practices In Minnesota
Led by CEO, Rezwan Manji, Imagen Dental Partners is a dental partnership organization (DPO) headquartered in Scottsdale, Arizona. They provide their dentists with financial incentives in three ways: getting paid for the dentistry they produce, getting paid for the profitability of their practice, and getting paid a portion of the profitability of Imagen as a whole.  With current operations in Arizona, Georgia, Illinois, Minnesota, South Carolina, Tennessee, and Wisconsin, rapid expansion is planned for 2021.

  • Westfield Dental: Imagen DPO continues to expand its footprint in Minnesota with the addition of Westfield Dental. Dr. Jack Fiedler and Dr. Benjamin Curtis have been bringing advanced dental technology and services to the rural community of Hector, Minnesota since 2012.
  • Fiedler Dentistry: Serving the communities of Cokato, Howard Lake, Dassel, Annandale, Litchfield, Hutchinson, Delano, Buffalo, and Watertown, the practice is lead by Dr. Paul Fiedler.
  • Regarding Dentistry, founded in 1956, the practice is lead by Dr. Laura Menser and Dr. Jack Fiedler.
  • Hutchinson Family Dentistry welcomes Dr. David Mach and Dr. Jorey Heit. This marks the addition of the fourth practice to the Minnesota chapter.

MB2 Dental Celebrates 300th Practice Milestone
MB2 Dental, the original Dental Partnership Organization, announced the closing of its 300th affiliated practice with Dr. Adrian Huang and Dr. Preston Huang, owners of Ninth East Dental and Canyon Road Dental in Provo, Utah. Additionally, MB2 entered its 30th new state, partnering with Dr. Joseph LaPonzina in Bel Air, Maryland.  In January, MB2 Dental announced its partnership with Charlesbank Capital Partners, a middle-market private equity firm based in Boston and New York. A total of 300 people (dentists and employees) opted to invest a total of $255 million alongside Charlesbank. MB2 currently partners with dentists in 30 states and counting. The Dallas, Texas-based DPO was founded and is led by dentist and entrepreneur CEO Dr. Chris Steven Villanueva.

Absolute Dental & Orthodontics Opens New Practice In Southern Nevada
Absolute Dental Group LLC announced that it has opened its newest dental practice in Nevada. Absolute Dental Group is headquartered in Las Vegas Nevada and is Nevada’s largest branded DSO with nearly 30 affiliated dental practices throughout Northern & Southern Nevada. Beginning with one practice in 2002, the growing group is lead by David Drzewiecki, CEO. Learn how Absolute Dental uses technology to easily scale efficiently and seamlessly on our podcast. He also discusses patient statement fulfillment, quick bill automatic payments capability and other integration with insurance verification third party. This podcast provides insight on how dental technology can help your dental group or DSO seize opportunities with a combination of standardization and flexibility.

Scotland’s biggest Dental Group Pushes Through 50-Practice Milestone with Six More to Come
Clyde Monro Dental Group, founded in 2015 by Jim Hall, has added Mearns Dental and Crookful Dental to it’s growing group. These two long-established practices mark a significant milestone in the Clyde Munro story, becoming their 50th and 51st dental practices. The founder says that COVID-19 has been a ‘final straw’ for many Scottish dentists who face huge regulatory requirements. The Glasgow-based group’s 51 practices provide for 400,000 patients and employ some 400 staff. This latest deal comes on the heals of the group acquiring McIntryre Corbet & Associates. They predict their acquisition spree to continue.

The Corus Network Welcomes New Partners into its North American Network
Founded in 2019, Corus Orthodontists is a growing orthodontic partnership network. Their model was founded by and is fully owned and financed by orthodontic specialists.

  • Engage Ortho: Corus Orthodontists proudly welcomes its newest partners—Drs. Mark Hanson, Melanie Hammerbeck and Susan Klobucarich of Engage Orthodontics, with locations in Green Bay and Appleton, WI. This is Corus’ first partnership in Wisconsin and its 11th in the US. Engage Orthodontics was born from a partnership between Drs. Hanson and Klobucarich, who were in separate independent private practices before joining forces in 2017. Dr. Hammerbeck joined them two years later in 2019. All three doctors share the same vision for growing their practice and expanding their reach.
  • Aurora Ortho: Located in Aurora, Ontario, this partnership marks Corus’ 19th practice in Canada and 30th in North America. Dr. Ali Shojaei started Aurora Orthodontics in 2006 and took a hands-on approach to building his successful practice. Today, he leads a team of five full-time staff and they have helped over 5,000 patients.
  • Popowich Ortho: Popowich Orthodontics is a Canadian practice based in St. Albert, Alberta. It was founded by Dr. Kurt Popowich, who has been practicing for 18 years. He is the sole practitioner of a 14-person practice and prides himself in cultivating a family-like atmosphere with his staff and patients.

Dental Care Ireland Group Welcomes their 21st Practice and Fifth in 2021
Dr. Gus Papathomas and team of over 20 in Waterford have joined the DSO. Established in 2014, Dental Care Ireland is a network of 21 local, family-focused dental practices across the country. To date, Dental Care Ireland employs over 250 team members across the country, comprising 80 general and specialist dentists, dental hygienists, dental nurses and practice managers, as well as operations, finance and marketing support staff. Practices are located in Dublin, Meath, Carlow, Mayo, Offaly, Wicklow, Galway, Kilkenny, Clare, Cavan and Louth. Dental Care Ireland will invest in upgrading and rebranding the practices in 2021.

New Investment Group Buys Out Mydentist
IDH group – which runs Mydentist – has announced Palamon Capital Partners will buy the remain shares in the business from The Carlyle Group. Mydentist has a network of almost 600 practices, making it the largest provider of NHS dentistry in the UK. Mydentist say the buy-out will provide ‘fresh investment’ to support the company’s future plans, as well as provide the management team with greater strategy control. The existing team will remain to guide IDH through the next stage, this includes Mydentist’s clinical directors, who support practices and clinicians in their provision of patient care.

42 North Welcomes a New Gentle Dental Location in Manchester, NH
42 North Dental is a DSO in New England which supports over two dozen practice brands in 81 locations, including Gentle Dental. Gentle Dental has been operating in New England for over 45 years. 42 North Dental recently hired Johnny Khouri as their COO. He spent more than 12 years at CVS Health. Learn more about 42 North’s M&A and practice valuations post COVID-19 in this free webinar. Learn more from their senior manager, talent acquisition, Priyanki Amroliwala, who discusses all aspects of dental recruitment – a hot topic – in this recent podcast.

Western Dental Opens New Office in Atwater
Western Dental & Orthodontics announced the opening of a new Western Dental & Orthodontics office in Atwater, California. Western Dental provides services to adults and children in the Medi-Cal Dental program (known as Denti-Cal) – part of the Medi-Cal public insurance program that provides health care benefits for more than 13 million individuals and families in California. Western Dental welcomes patients covered by Denti-Cal, in addition to accepting uninsured and privately insured patients, at all of its California offices. Western Dental (with its supported affiliates, including Brident Dental & Orthodontics and Vital Smiles) serves approximately three million patient visits annually in 333 affiliated offices throughout California, Texas, Arizona, Alabama and Nevada.

Aspen Dental Opens 13th Practice in Virginia  and 23rd Practice in Wisconsin
Aspen Dental has officially opened its doors in Christiansburg, Virginia with the opening of a brand-new office. This is the 13th Aspen Dental practice in the state of Virginia. The DSO also officially opened its doors in Marinette, Wisconsin with the opening of a brand-new office, bringing two dentists, Dr. Katherine Leyes and Dr. Sandra Swing, to the community. Independently-owned and operated, Aspen Dental offices offer programs and services that make it easier for patients to get the dental care they need, including on-site denture labs. Aspen Dental Management, Inc. (ADMI) now supports more than 1,000 health and wellness offices across 45 states and in three distinct categories: Dental care, urgent care, and medical aesthetics. ADMI also recently earned program approval for continuing education (PACE) designation by the Academy of General Dentistry (AGD). PACE was established to create, improve and promote quality dental continuing education and to assist the dental profession in identifying and participating in quality continuing education opportunities.

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