DD Group sold by Palamon and IDH Group

Zina Fragkiadaki
May 23, 2022
M&A

Private equity firm Palamon Capital Partners and dental provider IDH Group have entered into a binding agreement to sell DD Group, formerly Dental Directory, the UK and Irish dental and medical aesthetics distributor and service provider, to an affiliate of Sun European Partners.

The terms of the transaction were not disclosed.

Palamon has been a long-term investor in IDH, having originally acquired the business in 2011 in partnership with The Carlyle Group. Palamon said the sale concludes phase one of its investment plan to return IDH to a pure-play dental services company, following the firm’s reported £700 million deal, in partnership with the management team of IDH, to acquire The Carlyle Group’s majority position in August 2021. The proceeds from the divestment will significantly deleverage the business and provide substantial cash to support deeper investment into the existing network of clinics and M&A.

Founded in 2005, the IDH Group today offers dental treatments to more than four million patients every year through its network of almost 600 dental practices operating under its consumer brand {my}dentist. Following the transaction {my}dentist will remain a customer of DD under long-term supply arrangements for dental products, equipment and engineering services.

IDH Group acquired Dental Directory in 2014 for an undisclosed sum. DD has accelerated growth in the past three years achieving revenue compound annual growth rate (CAGR) of 16%, to generate £210 million of revenue in the year ending March 2022, according to the company.

The sales process was managed by DC Advisory. Fabio Massimo Giuseppetti, partner at Palamon, said that the sale process generated an outstanding outcome which will both significantly deleverage the business and provide substantial cash for growth.

Tom Riall, chief executive of IDH, said: “As well as being great news for DD, this sale will also provide {my}dentist with fresh investment to accelerate our growth plans, ensuring more patients get access to the affordable care they need, and helping us deliver on our ambition of being the best place to work in UK dentistry for all of our clinicians and practice teams.”

Paul Adams, chief executive of DD, added: “We have ambitious plans at DD to consolidate our position as the leading provider of dental and medical aesthetics products and services in the UK and Ireland. This deal will help us to realise those plans, becoming the first choice across both sectors for clinical treatment solutions. Under this new ownership, we will have the financing and operational independence to continue expanding, support a growing number of customers, and pursue new markets across the UK, Ireland and beyond.”

The transaction is expected to complete in June.

Sun European was advised on the transaction by Houlihan Lokey (M&A and Debt Advisory), CIL Management Consultants (Commercial), S&C Advisors (Tax), FTI Consulting (Financial) and Milbank (Legal). The sellers were advised by DC Advisory (M&A), Slaughter & May (Legal), PwC (FDD and CDD) and Deloitte (Technology DD).

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