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Scoop: MyOrthos in market

Jan 23, 2023
Illustration of a one dollar bill zoomed in to show George Washington smiling with a mouth full of white teeth.

Illustration: Gabriella Turrisi/Axios

MyOrthos, an SV Health-backed orthodontics platform, is exploring strategic options, sources tell Axios.

Why it matters: MyOrthos is the third dental deal to come to market, signaling an investor sweet tooth (sorry, not sorry) for the space, this year.

What's happening: Moelis was hired to advise Boston-based MyOrthos on options that include a growth equity raise or sale, sources say.

  • MyOrthos is being marketed on around $20 million to $25 million in EBITDA, they add.
  • A process is underway, with talks having started late last year.

By the numbers: MyOrthos, which offers orthodontia and dentistry services, has 67 practices and 72 orthodontists in 12 states in the East Coast, Mid-Atlantic and Midwest.

Catch up fast: MyOrthos was founded in 2019 by CEO Elizabeth Campbell and chief dental officer Tyler Russell.

  • The company took in capital from Campbell's former firm SV Health that year.
  • MyOrthos completed a $127 million debt refinancing round in 2021 from Antares Capital and BMO Financial Group, and last year received $100 million of debt financing from the two lenders, per PitchBook.

Between the lines: As leverage for sponsor-backed deals continues to decrease, private equity firms reticent to inject more equity into new dental deals will likely have to ask doctors to roll more of their own profits in, one source says.

  • "Instead of rolling 20%, they have to roll 40 to get the transaction done," he notes. "It's going to be interesting to see how many doctors are willing to roll 40%."

State of play: Alongside steady PE-led M&A activity in general dentistry, orthodontics has garnered significant sponsor interest.

  • Thomas H. Lee Partners joined Linden as an equal investor in its orthodontics chain Smile Doctors at a $2.4 billion valuation in late 2021.
  • FFL invested an undisclosed amount in Orthodontic Partners in 2019.
  • Pamlico Capital acquired Canadian Orthodontic Partners from Sheridan Capital in 2021 for an undisclosed price.
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