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Scoop: Level Equity's Planet DDS evaluates sale

Apr 19, 2022
Illustration of a computer keyboard key with an icon of a tooth on it.

Illustration: Gabriella Turrisi/Axios

Level Equity is seeking a buyer for modern dental software company Planet DDS, multiple sources tell Axios.

Why it matters: Dentists have historically been slow adopters of new technology, presenting what is perceived to be a large growth and innovation opportunity amid an anticipated replacement wave.

  • Running practices more efficiently by centralizing non-clinical functions and streamlining workflows, for instance, can contribute to dentist recruitment (especially during today’s labor crisis), plus reduce costs.

What’s happening: An SVB Securities-run sale process recently kicked off for Planet DDS, with the Newport Beach, California-based company expected to command strong interest, the sources say.

  • Planet DDS, growing at a 40% rate, produces $50 million of ARR and is close to breakeven, they say.
  • A double-digit ARR multiple is anticipated, sources say, suggesting a deal could be valued at $500 million-plus.

How it works: Planet DDS helps independent dental practices and DSOs move their practice management software to the cloud, displacing legacy or haphazard systems.

  • Users of its Denticon practice management software, via a monthly subscription rate, save an average of 40% in the total cost of ownership while improving security, boosting patient experience, and creating a better IT infrastructure to scale, it says.
  • Its Apteryx imaging software, acquired for C$40 million in cash in 2020, aims to modernize clinical operations and diagnostics.

Flashback: Level Equity acquired Planet DDS from previous investors in mid-2019.

State of play: Investors have long put money to work behind traditional DSOs, but new technology to upgrade workflow has been a relatively sleepy area.

  • Dentists have historically relied on large, old-school vendors like Henry Schein and Patterson Dental.

Yes, but: The dental industry is ripe for digital transformation, and the proliferation of technology startups garnering investment could give the industry the cleaning it needs.

  • In cloud-based dental software, there’s Marlin Equity-backed RevenueWell and Battery Ventures-backed Curve Dental, among several others.
  • In February, DentalXChange, which enables dentists to electronically submit claims to payers, scored an investment from Bregal Sagemount.
  • And in August, General Catalyst and Insight Partners led a $27 million Series A financing in Overjet, whose dental artificial intelligence automates much of the clinical review process.

The bottom line: New technology may be the answer for the modern dentist or practice looking for a competitive edge.

Level Equity and the company did not return requests for comment, while SVB declined to comment.

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