Taking a Deeper Look at KKR’s Investment in Heartland Dental, the largest DSO in Country (with timeline)

Heartland Dental, the largest dental support organization in the United States, announced that it has entered into a definitive agreement whereby KKR will acquire a majority interest in Heartland from Ontario Teachers’ Pension Plan and other existing shareholders. Under the terms, Ontario Teachers’ will retain sizeable ownership and will continue as a significant partner to the company. Heartland Dental’s Founder and Executive Chairman Dr. Rick Workman, President and CEO Patrick Bauer, as well as supported dentists and employees will also remain significant shareholders.

Founded in 1997, Heartland Dental provides non-clinical administrative support services to supported dental offices representing a network of over 1300 dentists. Heartland Dental’s mission is to support dentists and their teams as they deliver the highest quality dental care and experiences to the communities they serve, while also providing exceptional careers and creating value for all stakeholders.

Some important points to note about this investment and the OTPP investment:

This investment is only the second majority equity event in the company’s 20-year history. In November 2012, Ontario Teachers’ was the first outside investor to take a majority position. At the time, Heartland Dental’s network consisted of 397 supported practices throughout 21 states. Today, Heartland Dental boasts a workforce of 11,000 employees who serve more than 840 supported dental practices across 35 states. Supported practice annual revenues stood at an estimated $1.3 billion at the close of 2017, which is a 126 percent increase in the five years since Ontario Teachers’ acquired its majority stake.

Another important aspect to know is that KKR is making its investment in Heartland Dental  through its Core Investments strategy fund, a newly created fund that is focused on a longer term investment strategy than typical private equity funds.

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