This year opened with a flurry of dental care-focused private equity investments. The sector is largely fragmented and ripe for consolidation. Pat Dugoni, principal at HGGC, told PE Hub last year that somewhere around 70 percent of the industry is still under independent dental practices.
“So that’s over 100,000 independent dental practices. We think there’s just a lot of opportunity for many years to continue to grow and build an M&A platform in dentistry,” said Dugoni. The conditions that were driving the market last year are still manifest and PE Hub is rounding up five deals below.
1. BlackRock invests in Lone Peak Dental Group
BlackRock Impact Opportunities Fund invested in Lone Peak Dental Group, a Colorado-based pediatric specialty dental support organization, in January.
Lone Peak was founded in 2003 and has 69 offices spanning 13 states.
“We are pleased to invest in Lone Peak Dental Group and support the company in increasing access to dental pediatric care in underserved communities,” said Ladell Robbins, head of BlackRock Impact Opportunities Fund. “Lone Peak’s strong fundamentals, successful track record of growth and mission-focused approach makes the company a compelling investment for our clients.”
BlackRock Impact Opportunities Fund will partner with Lone Peak’s management team to help extend the company’s footprint, according to Robbins.
Memorial Hermann Health System also invested in Lone Peak alongside the BlackRock Impact Opportunities Fund. Brightwood Capital and LBC Credit Partners provided financing for the transaction.
2. Martis Capital and Din Ventures back dental platform Archway Dental
In January, Martis Capital and Din Ventures invested in Archway Dental Partners, a dental platform based in Danbury, Connecticut.
Archway Dental was launched in partnership with Dental Associates of Connecticut, which was established in 1971.
“We have built a strong thesis around the multi-specialty dental market opportunity and could not be more excited to partner with the dentist owners of Archway Dental,” said Chris Beall, a partner at Martis Capital.
“We’re grateful to build upon DACT’s long history and are confident the Archway Dental platform will continue to support the highest quality dentists delivering care across the Northeast region,” he added.
Based in Chicago, Din Ventures is focused on the low- to-mid-market and has a strong focus within the dental industry. Martis Capital invests in mid-market healthcare companies and is based in Washington, DC, and San Francisco.
3. GTCR invests in 7to7
In February, GTCR invested in 7to7, a dental services company based in San Antonio, Texas.
7to7 was founded in 2008 and has nine operations in that area, offering a suite of services such as general and specialty dentistry, specialty endodontic and oral surgery services, orthodontics, as well as cosmetic and emergency dentistry.
The deal was done with GTRC’s management partnership of Kelly McCrann and Avryo Health Services. Justin Coke, the CEO, and Tiffany Winburn, DMD, chief clinical officer, retained substantial ownership in 7to7.
“We are thrilled about the partnership between Avryo and the 7to7 team,” said Sean Cunningham, managing director and co-head of healthcare at GTCR.
“Kelly, Justin and Tiffany bring together complementary strengths with a shared vision of advancing the dental care industry. We look forward to being part of the journey and leveraging GTCR’s experience building successful multi-site healthcare services companies,” he said.
GTCR is expecting to make additional investments in the business to fund future organic growth initiatives and strategic acquisitions.
4. KKR provides $2.34bn debt facility to MB2 Dental
Earlier in February, KKR provided a debt facility of $2.344 billion to MB2 Dental, a Dallas-based dental partnership organization.
KKR was the lead investor and arranger on the transaction. The financing will be used to fund upcoming acquisitions and future growth for the company.
In 2021, Charlesbank Capital Partners recapitalized MB2 Dental. KKR also led the financing at the time of Charlesbank’s investment in the company.
5. Tecum Capital invests in Five Point Dental Specialists
Tecum Capital invested in Five Point Dental Specialists, a dental support organization based in Fort Worth, Texas, in February.
Five Point Dental Specialists was founded in 2018.
“We’re grateful that Hilltop chose to partner with Tecum on this investment, providing an opportunity to add Five Point Dental Specialists to our healthcare portfolio,” said Matt Harnett, a partner at Tecum Capital, in a statement. “We look forward to both this and future partnerships with Hilltop.”
Tecum, alongside Hilltop Opportunity Partners, provided capital to support the growth of Five Point led by Casla Partners, the founders and the management team.
Harnett, Paul Oris and Zac Forsyth led the investment team at Tecum.
