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Exclusive: Oral surgery network Allied OMS nets $116M credit facility

Illustration of a toothbrush with dollar bills as bristles.

Illustration: Shoshana Gordon/Axios

Allied OMS, an oral surgery managed services organization (MSO), secured $116 million credit facility from four separate banks, CEO Dan Hosler tells Axios exclusively.

The big picture: The fragmented oral surgery space has seen high levels of investor interest, with 30 add-on deals done in the last year.

Zoom in: KeyBanc Capital Markets served as left lead arranger for the syndicate, which includes BankUnited, Umpqua Bank, and First-Citizens Bank & Trust Company.

  • Harris Williams and Miller Johnson offered financial and legal counsel to Allied OMS, respectively.

What's next: Currently backed by independent sponsor DuneGlass Capital, Allied OMS is "looking to bring on our first outside private equity investor" by the end of this year or early next year, Hosler says.

  • In the meantime, fresh financing will help the company partner with other practices, and build de novo and satellite offices.

How it works: Fort Worth-based Allied OMS provides oral and maxillofacial surgery services across 39 locations in 11 states. The company employs 60 doctors.

  • Ownership is split between surgeons, DuneGlass and management consulting veterans.
  • The company has partnered with 30 independent oral surgery practices over the last four years, Its doctors own more than 90% of the total business.

Between the lines: While private credit has dominated lending in most private equity transactions, Hosler says he didn't love the high interest rates — between 12% and 15% — private lenders were offering for this transaction.

  • "So we took a lower quantum of debt — a couple turns lower — for a lower interest rate from the traditional banks," he adds.

Flashback: Founded in 2020 in partnership with DuneGlass, Allied OMS started initial financing conversations at HPE Miami in March, Hosler says.

What they're saying: Hosler sees Allied OMS as a good home for new dental schools graduates, as well as small practices unable to keep abreast of constantly changing labor laws.

  • "In dental school, they discontinued the course of 'how to open your own practice,' so those coming out of school have no idea what this requires and entails," he says.

State of play: There are a handful of sizable sponsor-backed oral surgery players, some of which have also secured credit facilities in the last year.

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