Axios Pro Exclusive Content

Scoop: Founder-led Dentive seeks PE partner

Sep 29, 2022
Illustration of a toothbrush polishing a quarter.

Illustration: Gabriella Turrisi/Axios

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.

Go deeper