Palamon takes Dental Practices

London-headquartered private equity firm Palamon Capital Partners has acquired a majority stake in Associated Dental Practices for £136 million.

The dental practice was acquired from Smith & Williamson, the administrators of Kaupthing Capital Partners, the former private equity arm of Kaupthing Bank, and management.

The transaction involved refinancing the business with a senior debt package of £37.5m provided by Lloyds TSB Corporate Markets Acquisition Finance and Royal Bank of Scotland. The senior lenders have also provided an acquisition facility to allow for future growth in the company. Palamon was joined by co-investors AlpInvest Partners, Morgan Stanley Alternative Investment Partners and LDC, which invested £72m.

As part of the transaction ADP’s CEO, Bharat Patel, and his management team, will continue to manage the business.

Founded in 1985, ADP is the second largest provider of National Health Service (NHS) dentistry in the UK with 122 practices serving 1.5 million patients.

Partner at Palamon Capital Partners, Jonathan Heathcote said: “ADP is an excellent platform with which to continue to consolidate the highly fragmented UK dental market. We expect that the industry will see significant changes in the next decade and want ADP to be at the forefront of providing both primary care trusts and patients with efficient and high quality clinical services.”

This investment in ADP is the thirteenth transaction Palamon has made from its second fund, Palamon European Equity II, which now has over 60% of its £670m invested.