Planet DDS swallows QSIDental
Dental software company Planet DDS acquired QSIDental from NextGen Healthcare, marking the company's fourth — but likely not last — acquisition, CEO Eric Giesecke tells Axios.
Why it matters: Long overdue for a software update, the dental industry is beginning to nibble at digital offerings.
Driving the news: Planet DDS is taking advantage of two trends in the dental space:
- The shift from legacy on-premise servers to cloud-based software.
- Consolidation among dental groups, which is itself driving cloud adoption.
Context: Tech-forward dental startups are feeding those trends.
- Overjet recently collected $27 million in Series A funding from General Catalyst and Insight Partners to automate the dental clinical review process.
- DentalXChange secured an investment from Bregal Sagemount to help dentists submit claims to payers electronically.
Flashback: In April, Axios scooped that Level Equity was seeking a buyer for Planet DDS, which at the time was growing at a rate of 40%, producing $50 million of ARR, and approaching breakeven, sources said.
- Two months later, Planet DDS agreed to be recapitalized by Aquiline Capital Partners, with Level Equity rolling a portion of its existing equity and investing additional capital.
- The recapitalization "allows us to be a little more aggressively acquisitive and time the right investment," says Giesecke.
How it works: Founded in 2003 in Newport Beach, California, Planet DDS serves 10,000+ dental practices with subscription management software aimed at boosting security and improving IT infrastructure.
- Irvine, California-based QSIDental, another dental practice management software company, serves multi-location and multi-specialty dental enterprises.
- Deal terms were not disclosed.
🦷 Of note: Planet DDS had an existing relationship with NextGen Healthcare, an IT vendor for ambulatory and specialty practices located down the street from Planet's offices.
- In 2009, Planet licensed its dental EHR and practice management software, QSIDental Web.
- So when NextGen looked to focus on its core business and sell off its dental software, it turned to its neighbor.
What Giesecke is saying: As dental practices consolidate and add multiple locations, there's a big benefit to ditching legacy on-premise servers and moving to cloud-based software.
- "Most individual practices with legacy on-prem software don't see a benefit to being in the cloud, but when you're multi-site and want to have consolidated reporting, being in the cloud is imperative," says Giesecke.
What's next: Having now made a handful of acquisitions in companies focused on everything from imaging to patient management software, Planet DDS is keeping its eye on the market for its next buy.
- "We plan to be acquisitive, but selectively acquisitive," says Giesecke. "We look at great products with good teams that we can integrate into our core system of record."