Silverfleet Capital

European Dental Partners

Investment overview

European Dental Partners (EDP), headquartered in Lübeck, Germany, is a leading dental consumables distributor, operating in Germany and Central and Eastern Europe.

The trade division, branded M+W Dental, sells dental consumables and small appliances via mail-order and through state-of-the-art web-shops. In the German market M+W Dental has more than 40% market share in the mail order dental business, supplying both, practices and laboratories. The production division – Interadent – manufactures high quality and low-cost prosthetics, with laboratories in Germany and the Philippines.

Investment rationale

EDP is a clear demonstration of one of Silverfleet Capital’s principal investment strategies – buy and build. Having acquired the platform company, M+W Dental, in October 2004, we identified the importance of expanding the company’s operations outside of Germany to capture both the growth of the CEE markets and increasing levels of dental “tourism”. This could largely be achieved using the existing German product ranges and infrastructure.

Value creation

Together with management we embarked on an ambitious buy and build programme, completing 5 bolt-on acquisitions in the first three years of our investment.

EDP acquired three businesses in 2006. The first was Dentamed, the market leader in dental distribution in the Czech Republic; this was followed by the acquisition of Stomatol, Dentamed´s principal competitor in the Czech market. Following these two acquisitions, EDP became the market leading dental distributor in the Czech Republic and a platform for EDP to expand further into Central and Eastern Europe was established. At the end of 2006, EDP diversified its service offering when it acquired InteraDent, one of the largest dental laboratories in Germany.

Two other major acquisitions were completed during 2007: Prodent International, the Slovenian market leader in dental distribution; and Dentatus, which operates in Croatia. In addition to setting up “green field” operations in Switzerland and Austria in 2005, EDP also entered the Hungarian dental distribution market in 2007.

Outcome

In April 2011 we agreed to sell EDP for €170 million in a strategic trade sale to Lifco Dental International AB, the dental products division of Lifco AB, a privately held Swedish industrial group. The sale generated a return of approximately 2.5x our investment.