FFL Completes Acquisition of Midwest Dental

Private equity firm Friedman Fleischer & Lowe completed the purchase of a majority stake in Midwest Dental Holding Co. Inc.

Terms of the transaction were not disclosed, but the firm is investing out of its 2007-vintage Friedman Fleischer & Lowe Capital Partners III fund, which targets companies with enterprise values within the $50 million to $500 million range.

Last week, FFL received early termination under the Hart Scott Rodino waiting period to acquire the Mondovi, Wisc.-based target from Thoma Cressey Bravo.

In a prepared statement, FFL partner Aaron Money said the firm “reserved additional capital to support rolling out [Midwest Dental’s] management services to a greater number of practices.”

Midwest Dental currently serves more than 80 practices in Wisconsin, Minnesota, Illinois and Iowa. The company offers general dentistry services including restorative, diagnostic and preventative procedures.

Calls to FFL were not returned.

Chicago-based Thoma Cressey led a recapitalization of Midwest Dental in May 2007 and purchased all of its interests from Svoboda Collins LLC. Terms were not disclosed. Thoma Cressey invested out of its Thoma Cressey Bravo Fund VIII LP, which closed in January 2006 with $765 million from investors.

FFL already owns two companies in the dental space. Portfolio companies NCDR LLC and DPMS Inc. provide facilities and support staff to dental groups operating under the Kool Smiles brand, according to the PE shop’s website. FFL acquired Atlanta-based NCDR and San Ramon, Calif.-based DRMS in 2004 and 2006 respectively.

Purchasing Midwest Dental would not serve as an add-on to NCDR or DRMS.

In December, FFL sold Guardian Home Care Holdings to AccentCare. The firm also bought transmission parts manufacturer, Transtar Holding Co., through a secondary deal with Cleveland's Linsalata Capital. FFL has nearly $2.5 billion of assets under management with its last fund raise dating back to 2008. According to an SEC filing, the firm raised close to $1.5 billion for its third fund.

Other midmarket PE firms have capitalized on M&A within the dental space as well. Last week, Mergers & Acquisitions learned that Audax Group hired investment bank William Blair & Co. to shop Chicago-based Great Expressions Dental Centers Inc.

Sentinel Capital Partners on Dec. 29 sold Phoenix-based ReachOut Healthcare America Ltd., a provider of dental support service and care to underprivileged children, seniors, and military personnel. Terms were not disclosed.

A month earlier, Smile Brands Group Inc., backed by Freeman Spogli & Co., found a new private equity owner in Welsh, Carson, Anderson & Stowe. The price of that secondary buyout was not disclosed, but the Santa Ana, Calif. company said last April that it hoped to go public with an enterprise value of about $470 million.

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