A mere 18 months after pulling off the largest IPO in Canadian healthcare history (at the time), Canada’s largest dental office consolidator might be throwing up a FOR SALE sign.
What happened: Dentalcorp, Canada’s largest consolidator of dental clinics, has launched a review of its business to determine how to best “unlock shareholder value,” to which one answer could be “just sell the thing.”
- Dentalcorp shares have fallen almost 50% since their peak, while revenue (which is not bad per se) has disappointed investors.
Why it matters: The company’s struggles signal that high interest rates have dampened the enthusiasm for fast-click acquisitions and that corporate buying sprees for health clinics are subsiding.
- Dental offices, optometrists, and veterinary clinics were snapped up left, right, and centre by private equity firms this year, but the feeding frenzy has since slowed.
- It’s also harder to strike a deal these days. One expert told The Globe that “much of the low-hanging fruit has now been picked” leaving only the more desirable (and harder to acquire) clinics.
Zoom out: Dentalcorp’s fate could also be getting bought out by another consolidator. Its chief rival, 123Dentist, is a potential suitor and already bought another competitor this year.