Portfolio : DentMall
DentMall, founded in 1990 and headquartered in Miami, Florida, is a leading dental services organization that provides support and administrative services to more than 40 affiliated practices across seven states. DentMall’s affiliated practices provide high-quality general dentistry services to pediatric and adult patients under both commercial and government dental plans. The company has long-standing strategic relationships with several of the largest payers in its markets, and is a trusted provider of accessible and affordable general dentistry services.
Top Down Investment Thesis
Excellere’s investment in DentMall is driven by several factors including i) the dental industry’s general resistance to negative economic conditions, ii) an increased national focus on preventative dental services, iii) an increase in dental benefits covered through the Affordable Care Act, iv) a shift in industry focus towards accessibility and fee for outcomes based payer models for underserved populations, and v) a national shift from the traditional sole-practitioner model to larger group practices with back office and administrative support.
The dental services industry has historically been resistant to negative economic conditions, with the growth of national spending on dental services increasing from $92 billion in 2006 to $111 billion in 2012 (CMS). Future growth is expected to accelerate at an even faster pace driven by increased focus by policy makers on underserved populations in terms of dental treatment, expanded Medicaid coverage (and expanded commercial insurance coverage with the Affordable Care Act), and increased awareness of the negative health effects of untreated dental conditions. Split between Medicaid, health exchanges and employer sponsored insurance, 8.7 million children are estimated to gain comprehensive dental coverage through the Affordable Care Act by 2018. Also, 17.7 million adults are estimated to gain coverage through expanded Medicaid and exchanges. The dental service industry has evolved in recent years from one that is primarily served by sole practitioners to multi-facility, group practices. According to the ADA Health Policy Resource Center, single-facility practices declined from 76% of the market in 2006 to 60% of the market in 2010. However, even with this consolidation, 84% of all U.S. practices still consist of only one or two dentists.
Buy and Build Strategy
The dental services industry is a highly fragmented market consisting mainly of local and regional providers. Throughout its history, DentMall has demonstrated an ability to establish relationships with new de novo facilities by helping practices evaluate new market opportunities and supporting credentialing, payer contracting and local recruiting. This proven ability to open new facilities in a fragmented marketplace, combined with the opportunity to provide administrative services, expand support service offerings and help implement enhanced technologies, creates an attractive buy-and-build opportunity. DentMall is actively seeking strategic add-on acquisitions that will enable the company to broaden its geographic footprint and deepen its presence in the market.
To the extent you are interested in learning more about DentMall, please contact Rob Martin at (303) 765-2407, Ryan Glaws at (303) 765-2404, or Nate Raulin at (303) 765-2370 to discuss the dental services sector further.
3033 East First Avenue, Suite #700 | Denver, CO 80206 | 303.765.2400 | 303.765.2411 Fax