Integrated Dental Holdings (United Kingdom) - Jan 2008

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01 January 2008

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Merrill Lynch Global Private Equity (MLGPE) has backed the secondary management buyout of dental care provider Integrated Dental Holdings (IDH) in a deal believed to be valued at £300m. MLGPE acquired IDH from LGV Capital which had appointed Hawkpoint to manage a sale process. Financing for the transaction was provided by Bank of Ireland, Barclays, Merrill Lynch and RBS. MLGPE owns a majority stake in the newco.

Exit deal

The exit from IDH generated returns in excess of 4x cost and an IRR of 120% for LGV. The divestment came about following the commencement of a debt refinancing process to provide additional funds for acquisitions. A decision was subsequently taken to use the debt offers received to test the market for potential bidders and Hawkpoint was given the mandate to run the process. LGV acquired IDH from private shareholders including Luke Johnson in April 2006 (8 May 2006, page 22). The value of the deal, which was supported by debt provided by Barclays and involved a mezzanine strip supplied by European Capital, was not disclosed. LGV took a stake of just over 50% in the company. Under LGV’s ownership, IDH’s network has expanded from 127 practices to more than 200 through a combination of new openings and acquisitions, including that of Orthoworld in July 2007. This expanded its services into specialist orthodontics and implants.

Company

Bolton-headquartered IDH is the largest provider of dental care in the UK, operating more than 200 practices and serving more than 1.5 million patients with over 700 dentists and 1,700 employees. It was founded in 1996.

People

Eric Kump led the deal for MLGPE and Michael Mowlem, Jo Parfrey and Paul Landsman led the exit for LGV. David Hudaly is the founder and chief executive of IDH.

Advisers

Purchaser - Clifford Chance LLP, Matthew Layton (Legal)Purchaser - Merrill Lynch , (Corporate Finance)Purchaser - PricewaterhouseCoopers, (Corporate Finance)Vendor - CMS Cameron McKenna, Jason Zemmell, Jayne Brown, Stephen Seiff (Legal)Vendor - Deloitte, Allan Gasson, Dean Arnold, Tony Drabble (Commercial Due Diligence)Vendor - Hawkpoint, Ashok Patel, Bryony Holbrook, Ed Arkus, Mike Barnes, Patrick Wilson, Stephen Warner (Corporate Finance)Vendor - KPMG, Dave Laxton, John Moth (Other Due Diligence)