Permira has sold its investments in demedis and Euro Dental Holding to Henry Schein Inc, the largest provider of healthcare products and services to office-based practitioners in the combined North American and European markets. The combined businesses were bought for €255m.
demedis and Euro Dental Holdings are, according to Gotz Mauser, Frankfurt-based partner of Permira, effectively one company with one management structure. Permira’s investment in demedis resulted at the end of 1997 when the firm bought Siemens dental division. At that time the division consisted of two businesses: demedis and Sirona. Permira bought the combined business for $431.9m and gave a 15% stake to management. Sirona was sold in November 2003 to EQT in a secondary buyout for some €417.5m.
The Sirona and demedis business was split soon after being bought by Permira. While Sirona performed well, demedis did not. Much time was spent by Permira in turning that situation around and in 2000 demedis was effectively used as a platform to buy Muller & Weygandt, a market leader in the mail order dental distribution business in Germany, and Krugg, a leader in the Italian dental market. Muller & Weygandt was bought in early 2000 and Krugg in the summer of the same year. The transaction, for legal and tax reasons, was not structured as a buy-and-build but as a separate acquisition, known as Euro Dental Holdings, by Permira. From day one, however, both demedis and Euro Dental Holdings operated as one combined company.
Mauser says he is happy with the return on the investment, particularly the Euro Dental Holdings, which has outperformed, whereas the return on demedis, while still acceptable, has been impacted by the long hold period.
The sale to Henry Schein will close subject to regulatory approval.