Dental Corporation completes $41 million capital raising
11th January 2010
Dental Corporation Holdings Ltd (DC) has completed a $41 million capital raising to which will be used to fund its ongoing dental practice acquisition program as well as investment in growing capacity in its existing practice operations.
From acquiring the first practice in October 2007, DC is now Australia’s largest provider of dental services owning , or having under purchase agreements, over 100 practices Australia wide.
DC’s annualised revenue now exceeds $200 million and the company was judged by BRW as “Australia’s Fastest Growing Private Business” with revenues over $100 million in October 2009.
In conjunction with the capital raising, DC has also increased its debt facilities while extending the term for a further 3 years. The company’s debt syndicate includes three of the four major Australian banks.
The major participant in the capital raising was Caledonia Investments Pty Ltd. Their Joint Chief Investment Officer Will Vicars commented, “We have met a significant number of the DC dentists and been impressed with the very high quality of the people and the dental practices that they run. The model is clearly working very well. Acquisitions are now mostly all referrals from existing DC dentists and many of the dentists are already extending their contracts beyond the initial 5-year term. The earnings of the dental practices are consistent and growing, and DC’s significant acquisition pipeline underpins long duration earnings growth. We look forward to being part of the company’s continued expansion through to IPO and beyond”.
DC Executive Chairman Mark Evans said “this investment in our company is an important validation both of our business model and the opportunity to further expand in Australia. The investment community clearly identified the strengths and opportunity in our business. We received multiple offers of funding before settling on this offer which has allowed us to maintain our independence and will position us well for an IPO in the future. Coupled with the support of our bank syndication which was well oversubscribed, the response we have received from both the financial and dental communities have been outstanding”.
Mark Evans went on to add, “We have over 150 shareholders including our principal dentists, and are now well positioned to continue the growth we have delivered over the past 2 years. This contribution brings the total capital invested in our business to over $120 million and when combined with our undrawn debt facilities, provides us with around $100 million to invest in new acquisitions over the coming year. Given the fact that there are over 7,000 dental practices in Australia, the growth opportunities for DC are enormous”.
DC Executive Director Dr Ray Khouri commented, "Our partnership approach has proved very attractive to the larger sized, premium dental practices which are our target market. Our success to date has resulted from the fact that we are partnering with outstanding practices that have a solid foundation for sustainable growth. The DC business model has been created to incentivise performance while providing comprehensive back-office support thus alllowing our dentists to maintain operational and clinical independence. Our revenue and profit sharing structure ensures our dentists are well rewarded for their efforts.