Wednesday, October 24, 2012

Heartland Dental Care Worth $1.3 Billion?

The fight for the right to purchase Heartland Dental Care is heating up.

Private equity firms KKR & Co , Apax Partners and Madison Dearborn Partners are bidding for Heartland Dental Care Inc, one of the largest U.S. dental practice management companies and which could be worth around $1.3 billion, according to people familiar with the matter.

The buyout firms submitted final bids on Monday for Heartland Dental, which has been exploring a sale after hiring investment banks Jefferies and Moelis earlier this year, the people said.

Heartland Dental, in which Chicago-based private equity firm CHS Capital Partners has a stake, has about $120 million in annual earnings before interest, tax, depreciation and amortization and could be sold for 10 to 12 times EBITDA, Reuters reported previously.

The company is now owned by founder, dentist and CEO Rick Workman, Heartland employees, including dentists and CHS Capital who in 2008 purchased an equity stake in the company.

Workman is expected to stay on as CEO as part of the sale, according to one person familiar with the matter. A third of the company is owned by the CEO, a third by the employees, and another third by CHS Capital, the person added.

I am wondering of the State of New York lawsuit against Aspen Dental Care which employs a similar model of providing dentistry related services will give the private equity market pause?

Probably not here as it appears that Rick Workman is simply cashing out and will be guiding the company forward.

The interesting story will be how much the dentist employees and staff are paid through the purchase process.

Stay tuned....

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