Return to search

Riverside’s G&H Orthodontics braces for a sale

G&H Orthodontics, the Riverside Co-backed maker of brackets and bands for braces, is approaching a sale, according to three sources familiar with the matter.

The anticipated deal for the Franklin, Indiana, orthodontic-supplies company will mark the conclusion of an auction conducted by Piper Jaffray, the sources said.

Besides private equity, G&H was likely marketed to large strategics including the orthodontic-products units of 3M and Danaher, as well as Dentsply Sirona and Henry Schein, one source said.

Riverside, with offices across North America, Europe and Asia-Pacific, in December 2010 bought what was then G&H Wire Co from G&H management and Edgewater Funds.

The investment was made through Riverside Capital Appreciation Fund V. Riverside’s fifth fund closed in mid-2009 at $1.17 billion, ahead of its $900 million target, Buyouts reported at the time.

G&H makes orthodontic products including brackets, bands, tubes, wires, springs and elastomerics, as well as related clinical and office supplies. Branded and private label products are sold through distributors worldwide.

The company is led by President and CEO Kevin McNulty, who joined the company in March 2014 from Sirona Dental.

The company likely generates EBITDA in the $10 million to $15 million range, estimated two of the sources. G&H ought to command a multiple of EBITDA of at least 10x, one of the people speculated, noting the wide margins and strong free cash flow typical of the space.

Fueling interest for assets the likes of G&H is the increasing number of general-practitioner dentists expanding their services to include orthodontics, as opposed to referring out to specialists, this source said. At the same time, the orthodontics market continues to see technology advancements, the source added.

Another orthodontics-related company to watch is Smile Doctors of Georgetown, Texas, which sources have said is nearing the end of its William Blair sales process.

The Wall Street Journal initially reported in May that the Sheridan Capital– and Thurston Group-backed company was on the auction block.

Smile Doctors, which provides orthodontic care via practices in Texas and Georgia, is projecting close to $38 million in 2017 EBITDA, one source said.

Other sponsors investing in the space include Linden Capital Partners, which in 2013 purchased dental-supplies producer Young Innovations for $314 million.

There’s also Huron Capital Partners, which the same year snapped up Six Month Smiles, whose short-term cosmetic orthodontic treatment serves as an alternative to traditional braces or veneers.

Another notable deal announced less than a month ago was the sale of ClearCorrect — whose clear aligners rival those of Invisalign — to Switzerland’s Straumann Group. The restorative-dentistry company said in August it would pay about $150 million for ClearCorrect.

Riverside, for its part, sold DentalPlans.com in July. Terms weren’t disclosed. The identity of the buyer also was not disclosed, but a source familiar with the matter previously revealed Internet Brands as the acquirer of the dental care plans provider.

Representatives of Riverside declined comment, while those with Piper Jaffray didn’t respond to a request to comment.

Photo courtesy of LittleBee80/iStock/Getty Images