B.C.’s 123Dentist raises $425m to fuel dental practice expansion plans

Amin Shivji, CEO of 123Dentist | submitted

What happened: Coquitlam’s 123Dentists is tapping into $425 million in new capital

Why it matters: Growth capital will help it acquire more dental clinics across Canada, allowing dentists to eschew more of their administrative tasks

A B.C. company is sinking its teeth into some jaw-dropping growth capital.

123Dentist Inc. announced Thursday (June 26) it’s raised $425 million to accelerate plans to expand its dental practice network across the country.

The organization, which maintains an operations office in Coquitlam and a finance office in Toronto, offers practices non-clinical support for accounting, human resources, marketing and procurement while allowing its dentists to focus on performing dentistry.

“We go to school, we learn about doing dentistry, we learn how to do fillings, root canals, pulling teeth — all the basics of dentistry. But we really don’t get a course in business and the reality is the dental office is a sizeable business. So many people [excel] at it, many people fail at it, and it does become onerous to some,” CEO Amin Shivji, a dentist by trade, told Business in Vancouver.

“This was one way of protecting the industry and working together with dentists, by basically helping them with things they don’t like to do.”

Most of the $425 million in growth capital — some $300 million — is earmarked for what the company describes as committed growth capital.

Peloton Capital Management is furnishing about $25 million of the growth capital, while the remaining $300 million is coming from the refinancing of 123Dentists’ existing credit facilities in an arrangement co-led by the Royal Bank of Canada and the Bank of Montreal.

A separate stream of $125 million — also part of the $425 million that was announced — is coming from equity and debt partners.

Peloton contributed another $50 million to that stream of capital, separate from the $25 million earmarked for immediate growth capital.

Shivji said the plan is to use the growth capital to begin acquiring more clinics, which generally come at a cost of $3-4 million each.

“You buy 10 of those, or 20 of those or 30 per year and you’re using up that capital quite quickly,” he said, adding the company plans to expand its reach and acquire clinics in all 10 provinces by the end of the year.

123Dentist’s national platform launched in 2017 and currently includes about 70 practices in B.C., Alberta, Manitoba, Ontario and Quebec.

Its B.C.-based legacy platform, which maintains a different ownership structure, includes more than 60 practices.