ONE of Scotland’s biggest dental groups has won backing from private equity investors in a multi-million pound deal.
The Real Good Dental group has secured strategic investment from TriSpan in what has been described as a landmark transaction.
The investment is expected to help the company maintain its rapid growth in a market that TriSpan sees as attractive.
TriSpan said Real Good’s founders Satinder Dhami and Jagdeep Singh Hans had built a business of significant scale, which has the potential to grow significantly further both organically and through acquisitions.
“We are confident that Real Good Dental will continue to go from strength to strength in what remains a very dynamic sector,” said TriSpan.
Founded in 2012, Real Good has amassed a portfolio of 46 dental practices across the Central Belt of Scotland in the space of nine years. It has headquarters in Kirkcaldy.
READ MORE: Scottish dental market condolidator buys Orkney practice
As well as routine dental care, the group provides aesthetic services under its Westerwood Health brand.
The latest accounts for The Real Good Dental Company filed at Companies House show the business recorded retained profits of £433,000 in the year to March 2020. The business employed an average of 122 people during the year.
The TriSpan deal underlines the scale of investor interest in the dental sector, in which many relatively small practices are active.
This leaves scope for financial investors to pursue the kind of consolidation strategies that are a standard feature of the private equity tool kit.
TriSpan noted that it was supported in the deal by the Keyhaven Capital private equity business. On its website London-based Keyhaven notes that some services industries in Europe are dominated by smaller companies and are ripe for consolidation.
Real Good was able to secure backing from the two investment businesses, which have taken undisclosed stakes in the business, in spite of the disruption caused by the coronavirus crisis.
Christie & Co advised on the deal. Paul Graham, head of dental at Christie & Co, said it was a landmark transaction within the UK dental space.
“Real Good Dental sits within the top 10 dental operators in the UK in terms of aggregate number of practices owned,” said Mr Graham. He added: “We began advising Real Good Dental during the midst of the Covid-19 pandemic and despite the obvious flux within the market at that time it was reassuring to see significant interest from the investors we approached, it really underpins the strength of the dental market.”
TriSpan has offices in London and New York.
Its investment portfolio includes the ProSmile dental support business in the US and UK skincare business sk:n, along with the Stacked casual dining chain.
Details of the investments made by TriSpan and Keyhaven were not disclosed.
Christie & Co said TriSpan invests in lower mid-cap companies in North America, Europe, and the United Kingdom with annual revenues typically ranging from $20 million (£14.5m) to $100m.
READ MORE: Prospect of tax changes will fuel mergers and acquisitions in Scotland reckons expert
Mr Hans said TriSpan was the perfect fit to help the Real Good Dental group to achieve its aspirational growth plans.
“It has strong credentials both as investors in the healthcare services sector and as backers of founder-led businesses, and we look forward to working with the team in this very exciting stage of development for our business,” said Mr Hans.
Glasgow-based Clyde Munro dental group has developed a portfolio of around 50 practices across Scotland helped by acquisitions. It has won backing from the Synova private equity business and Investec bank.
On its website, Synova describes Clyde Munro as a consolidation platform focussed on the Scottish dental market.
In June Clyde Munro acquired the Mearns Cross and Crookfur Dental practices in Newton Mearns. Synova noted then that Clyde Munro had a strong pipeline of future acquisitions.
Financiers have supported moves to consolidate other markets in which services have historically been provided mainly by local independents, such as veterinary and optical care.
READ MORE: Cuts at Scots optical chain amid high street stress
Keyhaven Capital’s portfolio includes the Dr Barbara Sturm aesthetic medicine business.
Christie & Co said Mr Dhami has now stepped back from Real Good Dental to focus on his other investments.
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