Australian dental services have been a happy hunting ground for domestic private equity firms, which like the defensive earnings, highly fragmented industry and ageing dentists thematic. As it stands, Pacific Smiles cuts a lonely figure – making it a prime target of private equity interest.
The group, which operates 120 dental clinics in NSW, Victoria, Queensland and the ACT, lost listed rivals 1300 Smiles and Abano Healthcare in a 12-month period, both to aggressive buyout shop BGH Capital, which also snapped up Healius’ 62 dental clinics as part of a wider medical centres deal.
Tooth hurty o’clock?
But gaining control of Pacific Smiles could be like pulling teeth. Genesis looms large on the register, snapping up 18.75 per cent of the company alongside its bid. It upped its stake to 19.9 per cent on Wednesday. Abrahams controls 12.58 per cent, co-founder Alison Hughes another 9.9 per cent and MA Financial holds 11.13 per cent. Health insurer HBF Health holds just over 10 per cent, which it picked up when shares were trading above $2.50 a piece.
Pacific Smiles appointed Wesfarmers Health executive Andrew Vidler as its new chief executive earlier this month. It last reported $24.1 million underlying EBITDA on the back of higher revenue and improved operational efficiency and $4.5 million statutory net profit after tax.
The board is working with Greenhill & Co on defence – and has been since it was forced to fend off an activist campaign from founder Alex Abrahams in late 2022. Gilbert + Tobin is its legal adviser. Genesis is advised by Jarden and Clifford Chance.
