Palamon to carve out Dental Directory from IDH Group

The private equity firm awarded DC Advisory the sell-side mandate, with distributed materials marketing the asset off GBP 15m, three of the sources said.

IDH bought DD in 2014 and also owns MyDentist, a chain of dental clinics in the UK. Palamon is selling DD to focus on the dentistry services business, one of the sources said. DD has around a 25% market share in the UK, according to filed accounts.

Management presentations will take place at the end of this week, one of the sources said.

DD recorded GBP 137m revenues in the year-end to March 2021 (24% of the group total) and adjusted EBITDA of GBP 6.7m (12% of the group total), according to filed accounts. The whole group was heavily impacted by the COVID-19 pandemic, according to the filings, but DD pivoted to large bulk orders of PPE and away from dental supplies when dental practices were closed.

Palamon took majority control of IDH in 2021, after it had owned a minority alongside Carlyle's majority stake since 2011, as previously reported. The private equity firm bought the company for an enterprise value of GBP 700m, at a 10x trailing EBITDA multiple that reflected the high indebtedness of the group, according to media reports.

Dental Directory operates with single-digit margins, as is common with distribution sources, said two of the sources, while one pointed to it being 6%. Key competitor Henry Schein operates on margins of 9% globally with a much larger EBITDA of USD 1bn, one of the sources said.

IDH, Palamon and DC Advisory did not respond to a request for comment.

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• Topics
• Exits
• Healthcare
• UK / Ireland
• Mergermarket
• Palamon Capital Partners
• United Kingdom
• DC Advisory Partners