Healthcare sector comment: Dental services

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The dental market in Western Europe remains highly fragmented and presents an investment opportunity to both financial investors and strategic buyers. The consolidation provides both operational and procurement efficiencies which drives further M&A activity.

We’ve seen a significant amount of activity in dental care across Finland, the Netherlands, Spain and the UK, consolidating the market and creating multi-channel dental practices. We expect to see this consolidation to roll out across the rest of Europe.

In particular the US market has been driven by people being introduced to the benefits of having dental insurance which accommodates structured payments. These packages allow people to undergo additional dental work at a reduced cost, increasing demand for services. Healthcare reforms and better reimbursement scenarios will likely increase the volume of people able to access dental care.

Due to the rapid rise and exposure of social media, there is an increased focus on personal appearance. The demand in people using dental services, in particular cosmetic dentistry and facial aesthetic treatments has risen. The Plenido SA and Folsom Dental Group deals show that dental service businesses providing aesthetic dental services are becoming more desirable to investors in Europe and the US.

At Clearwater International we will continue to watch the dental services market with interest. We expect to see further consolidation by Pan-European dental companies looking for back office synergies, and using buyer purchasing power to improve operational efficiencies. This consolidation model is similar to what the vet practice space is experiencing.

In the last 12 months alone we have seen the following dental service deals:

  • Colosseumklinikken AS the Norway-based business offering dental care services has bought Oral Hammaslääkärit, the Finland-based provider of dental health care services from private equity firm CapMan
  • EQT Partners the Sweden-based private equity firm has acquired Curaeos B.V, the Netherlands-based provider of dental care products and services
  • CBPE Capital LLP the UK-based private equity firm has acquired Rodericks Dental Limited, the UK-based dental healthcare business
  • Jacobs Holding AB the Switzerland-based private equity firm has acquired Southern Dental Limited, the UK-based dental healthcare business
  • BC Partners the UK-based private equity firm has agreed to acquire DentalPro, the Italy-based dental health care clinic operator, from Summit Partners
  • Universal Partners Ltd. the Mauritius-based investment business has acquired Dentex Healthcare Group, the UK-based provider of funding for dental service businesses, for c.€17m
  • Jacobs Holding AG the Switzerland-based private equity firm has acquired Colosseum Smile AS, the Norway-based operator of dental care centres and laboratories
  • Bupa Finance plc the UK-based provider of health insurance and medical subscription products has acquired Oasis Healthcare Limited, the UK-based dental practice operator, for a total of c.€950m
  • Western Dental Services Inc. the US-based provider of dental care services has acquired Kids Dental Kare, a US-based provider of children’s dental care
  • Portobello Capital Fondo the Spain-based mid-market private equity firm has acquired Plenido SA, the Spain-based dental clinic operator
  • A + Dental Care the US-based provider of dental care services has acquired Folsom Dental Group, a US-based dental services business
  • Abano Healthcare Group Ltd the New Zealand-based listed healthcare and medical services provider has acquired 3 dental practices
  • National Dentex Corporation the US-based operator of dental laboratories has acquired Albensi Dental Laboratories Inc, the US-based dental laboratory operator
  • Weston Hill asset Management the Spain-based Private equity firm has acquired iDental, the Spain-based dental care company for c.€25m
  • Sentinel Capital Partners LLC the US-based private equity firm has acquired MB2 Dental Solutions, the US-based provider of dental management and practice development services
  • 1300 Smiles Ltd the Australia-based provider of dental and management services has acquired 3 dental practices in Queensland

 

Below are a selection of recent healthcare sector deals

Medical Equipment & Supplies

  • Stryker Corporation the US-based manufacturer of medical devices and medical equipment has acquired NOVDAQ Technologies Inc, the Canada-based provider of comprehensive fluorescence imaging solutions in a deal worth c.€611m
  • Tiansheng Pharmaceutical Group Co, Ltd the China-based pharmaceutical products manufacturer acquired a 51% stake in Hubei Xianming Medical Equipment Co, Ltd, the Chinese immunodiagnostics firm, paying c.€650m
  • M3 Inc the Japan-based company offering medical-related services through the internet has agreed to acquire COSMOTEC Co, Ltd, a Japanese company that sell medical devices for cardiovascular surgery for c.€7.49m
  • Dentsply Sirona Inc, the listed US dental products manufacturer has acquired Healthdent Technology Intl, Inc, a US provider of Dental supplies
  • China Biologic Products Holdings Inc the China-based manufacture of human plasma-based biopharmaceutical products has agreed to acquire Tianxinfu Medical Appliance Co, Ltd, the China-based manufacturer of regenerative medical biomaterial products for c.€566m
  • Integra LifeSciences Holdings Corporation the US-based manufacturer of surgical implants has acquired Johnson & Johnson’s Codman neurosurgery business based in the US for c.€986m
  • BTG plc the UK-based manufacturer of pharmaceutical products has acquired Roxwood Medical, Inc, the US based provider of cardiovascular speciality catheters for c.€68m
  • Vance Street Capital LLC the US-based private equity firm has acquired Fermatex Vascular Technologies LLC, the US manufacturer of medical catheter components

 

Health and Social Care

  • American Medical Alert Corp. the US-based provider of health communication and monitoring services has acquired Providence Lifeline Medical Alert Service, the US-based healthcare monitoring services business
  • Nytida AB a Swedish-based firm that offer assistance for those with mental disabilities has acquired Brostugegården Aktiebolag, a Swedish provider of psychiatric support for those with mental and social disabilities
  • Solasto Corporation the Japan-based business offering child care services agreed to acquire Best Care K.K, the Japan-based provider of nursing service for c.€25m
  • Esperi Care Oy the Finland-based company that offer residential care for the elderly, has acquired Helmen Hoitajat Oy, a Finland-based elderly nursing home operator
  • Allscripts Healthcare LLC the US-based provider of healthcare information technology solutions has acquired the hospital and the Enterprise Information Solutions business of McKesson Corporation for c.€155m
  • Meinian Onehealth Healthcare Holdings Co, Ltd the China-based Health examination and medical services company has acquired the remaining stake of Ciming Health Checkup Management Group Co, Ltd, the China-based chain of health check-up centres for c.€362m
  • Virtus Health Ireland Limited the Ireland-based fertility clinic operator has acquired an additional 15% stake in The Sims Clinic Ltd, another Ireland-based fertility clinic operator. This deal increases Virtus Health’s ownership of Sims to 85%
  • The Halifax Group the US-based private equity firm has acquired Delphi Behavioural Health Group, LLC, the US-based provider of mental health treatment programs

 

Pharma and Biotech

  • Pamplona Capital Management LLP the UK-based private equity firm has acquired PAREXEL International Corporation, the listed US-based bio pharmaceutical services company, for a deal value of c.€4bn
  • Eurofins Scientific SE the analytical testing services company has signed an agreement to acquire DiscoverX Corporation, a biotechnology company based in the US
  • FutureChem Co.,Ltd the South Korea-based company that provides radiopharmaceuticals has acquired Kai Health Care Co., Ltd, a South Korean firm that manufactures pharmaceuticals and radioactive diagnostic reagents for c.€3.69m
  • Phibro Animal Health Corporation the US-based animal health business has completed the acquisition of Biotay SA, an Argentina-based animal health antibiotics manufacturer
  • Gilead Sciences Inc the US-based developer of medicines has acquired Kite Pharma Inc, a US-based company focused on the development of cancer immunotherapy products for c.€8.7bn
  • Catalent Pharma Solutions, Inc the US-based provider of development solutions and delivery technologies for drugs, biologics and consumer health products, has acquired Cook Pharmica LLC, the US-based contract development and manufacturing organization (CDMO) for c.€793.6m
  • Karo Pharma AB the Sweden-based company that develops and markets products for pharmacies has acquired Weifa ASA, the Norway-based manufacturer of non-prescription and over-the-counter products for c.€137m
  • Mesa Laboratories, Inc the US-based manufacturer of quality control instruments and disposable products has acquired SIMICON GMBH, the Germany-based manufacturer of Biological cleaning and disinfection control indicators