123Dentist and Altima Dental Announce a Strategic Merger with Support from Peloton Capital, KKR, and Heartland Dental

123Dentist combines with Altima Dental and Lapointe Group, solidifying its position as one of the largest dental support organizations in Canada
123Dentist, Altima Dental, and Lapointe Group have entered into a merger agreement to create one of the largest dental support organizations in Canada, with nearly 350 supported dental practices. The transaction is being financed through equity capital provided by 123Dentist’s existing financial partner, Peloton Capital Management; new investors KKR, a leading global investment firm, and Heartland Dental, a KKR portfolio company and the leading dental support organization in the U.S.; and Sentinel Capital Partners, Altima Dental’s existing financial partner.
123Dentist will continue its dentist-first, patient-focused growth strategy and pursue attractive opportunities with dentists looking for long-term partnership solutions that provide flexibility and autonomy to operate their dental practices in a manner that reflects the unique needs of each clinic and dentist partner. This includes opportunities for clinic level ownership by dentists, a feature incorporated at a majority of 123Dentist’s supported practices today and designed to promote the continued delivery of high-quality care to patients. 123Dentist’s leading platform provides its supported practices a wide range of administrative support services facilitated through a team of locally based regional managers and support centres in Vancouver, Toronto, and Montreal.
“We expect this merger to benefit Canadian dentists, dental professionals and patients alike, greatly expanding support services for an already thriving dentist community that focuses on the delivery of exceptional care, improving access to high quality dentistry services, and increasing opportunities for career advancement and mentorship for our team members,” said Dr. Amin Shivji, CEO of 123Dentist.
The values and operating philosophies of 123Dentist align closely with those of Altima Dental, a leading dental support organization founded in 1993 and currently comprised of over 100 dental practices. As a result of this transaction, the combined business will have a national footprint and support dental practices that provide a wide range of dental care to more than 800,000 Canadian patients, with over 2.5 million patient visits annually.
“As a dentist-led organization for nearly 30 years, we know how important it is for patient care to have the dentist perspective when building a successful platform of supported dental practices. This is one of the many reasons why this combination will enable our supported dentists to continue to deliver an exceptional patient experience to Canadians,” said Drs George Christodoulou and Sven Grail, co-Founders and co-CEOs of Altima Dental. “Now, as part of the 123Dentist family, we are incredibly well-positioned to further develop our capabilities as one of the leading dental support organizations in Canada.”
Heartland Dental to support the expansion of education, training, supplies and equipment strategic sourcing
As part of this transaction, Heartland Dental and 123Dentist will work together to facilitate the expansion of education and training at 123Dentist for its supported dentists, dental hygienists, dental assistants, and administrative team members. 123Dentist will gain access to Heartland Dental’s world-class continuing education programs to expand the capabilities of its supported practices, improve the patient experience, and provide supported dentists the tools to enhance the quality of care. Additionally, Heartland Dental’s deep relationships with leading dental manufacturers and distributors will support an expansive, world-class formulary of clinical supply, equipment, and clear aligner options to 123Dentist supported dentists and hygienists.
“This is an important strategic partnership for Heartland Dental and our first outside of the U.S. We have always respected the dentist-led successes of 123Dentist and Altima Dental and believe this is a great opportunity to not only invest in 123Dentist but also bring our full suite of capabilities to Dr. Amin Shivji and his team across all aspects of non-clinical support, anchored by our 25 years of experience,” said Pat Bauer, Heartland Dental President and CEO.
Peloton Capital Management and KKR to provide further industry expertise and financial support
Toronto-based private equity firm Peloton Capital Management, which first partnered with 123Dentist in June 2019, will be raising additional funds to support the transaction. “This is a transformative transaction for 123Dentist, and we look forward to continuing to support Dr. Amin Shivji and the management team,” said Steve Faraone, Managing Partner at Peloton Capital Management. “123Dentist has established itself as one of the largest dental support organizations in Canada, providing a sustainable partnership model that allows its dentist partners to put patient care at the forefront. Expanding the relationship with Pat Bauer, Dr. Rick Workman, and the Heartland Dental team will be an incredible benefit to 123Dentist, allowing the team to learn from them to support its growth.”
KKR, which is acquiring an interest in 123Dentist through its investment funds, brings deep health care and dental industry expertise. Since acquiring a majority interest in Heartland Dental in 2018, KKR has helped the company scale and double the number of practices it serves to over 1,600 in 38 states. Vishal Patel, a Managing Director at KKR, said “we believe this is an excellent strategic partnership that shares a common mission of supporting dentists providing high-quality dental care to Canadians. Working alongside Dr. Amin Shivji and the talented teams from 123Dentist, Altima Dental and Lapointe Group, as well as Peloton and Heartland Dental, the company is primed to scale to the benefit of thousands of supported dentists and patients across Canada.”
Sentinel Capital Partners, a New York-based private equity firm that invested in Altima Dental in December 2016 as well as multiple dental support organizations over the last 20 years, will also maintain a minority ownership position in the combined entity, alongside the founders of both Altima Dental and Lapointe Group. “We are grateful for the strong partnership we have had with the founders and management teams at Altima Dental and Lapointe Group,” said Paul Murphy, Partner at Sentinel Capital Partners. “We are looking forward to supporting Dr. Amin Shivji and the combined 123Dentist team as they continue to build a leading dentist-centric organization.”
The transaction is subject to customary closing conditions, including clearance under the Competition Act (Canada), and is expected to close in the third quarter of 2022.
Advisors
RBC Capital Markets acted as financial advisor to 123Dentist. KPMG LLP and E&Y LLP acted as accounting and tax advisors, Torys LLP acted as legal advisor on the transaction, and Miller Thomson LLP served as corporate legal advisor to 123Dentist.
Houlihan Lokey acted as financial advisor to Altima Dental. Stikeman Elliott LLP and Kirkland & Ellis LLP were legal advisors and Grant Thornton LLP was tax advisor to Altima Dental on the transaction.