Scoop: Founder-led Dentive seeks PE partner
A sale process is underway for founder-led dental support organization Dentive, multiple sources tell Axios.
Why it matters: Dentive plays in markets — including its Provo, Utah headquarters, or the so-called Silicon Slopes — that have seen massive post-COVID growth as people swap pricy cities for a more affordable life.
- That translates to greater opportunity for many sectors in those underpenetrated markets, including dental care.
What's happening: Dentive's auction process is private equity-focused, sources say.
- Houlihan Lokey is providing financial advice to Dentive, with the company marketing roughly $40 million of EBITDA, sources say.
- Led by founder Tom Clark, Dentive provides tech-enabled, non-clinical support to affiliated specialty and general dentist partners.
How it works: Dentive is said to have a heavy doctor ownership model — and that may align with the evolution of PE-backed DSOs trying to balance physician autonomy and growth.
- As the industry (and PE participation) has evolved, there's also a movement to shared services on a bespoke basis, versus the take-it-all model, one source notes.
Between the lines: Geography matters.
- Not every DSO is created equal from an organic growth perspective.
- Factors that impact expansion include a concentration in rural versus suburban markets if players have specialty dentistry offerings, how they manage staff, etc.
Zoom in: The four-year-old Dentive is situated in some flourishing markets.
- Provo replaced San Francisco in 2021 as the No. 1 big metropolitan area with the best regional economy, per Milken Institute's annual ranking, Axios wrote.
- And, another one of its major markets — Bend, Oregon — ranked 13th in population growth among all U.S. metro areas from mid-2020 to mid-2021. Dentive also has a presence in Washington.
State of play: BlackRock Long Term Private Capital last week agreed to buy a majority stake in Paradigm Oral Health from InTandem Capital Partners, valuing the oral surgery company north of $900 million, Axios wrote.
- And, ICYMI: Axios wrote Wednesday that BC Partners formally kicked off its sale process for Zest Dental Solutions, the dominant player in overdenture attachments used to implant a full set of teeth.
The big picture: While dentistry is a well-trod sector for private equity, the industry, and the needs of dentists are constantly evolving.