Dental companies have continued to invest in oral surgery as the specialty is projected to continue seeing growth in the next few years.
Despite taking a hit along with overall healthcare transactions during the first half of this year, transactions in the oral surgery field are expected to pick back up through the end of 2023 and in 2024.
Brian Hamilton, a managing director at investment firm DuneGlass Capital and chief development officer at Allied OMS, told Becker's earlier this month that he expects to see more oral surgery-focused transactions this year because companies have lowered valuation expectations and investors want to invest their money in quality assets.
"Valuation expectations have been challenging, but the valuation gap is decreasing, largely because selling practices now recognize the increased cost of capital, and some platforms adjusted spending in the first half of the year to optimize operations," he said. "As a result, we expect oral surgery investments to pick up earlier than the other specialties, primarily because of this higher margin profile and lower exposure to commercial and governmental payers."
Mr. Hamilton added that oral surgery groups in 2024 will be looking toward investing in new locations, expanding current offices and entering new geographies.
September saw the launch of Max Surgical Specialty Management, a surgeon-led oral and maxillofacial surgical partnership platform. The group currently supports 16 offices and 25 surgeons in New Jersey, but plans to double its network in the next 12 months.
Co-CEOs Jason Auerbach, DDS, and Jeff Ward, also shared with Becker's their expectations for oral surgery investment.
"There are a lot of investments in different specialties and there has not been a lot of investment in oral surgery, so because it remains so fragmented, it has a very high level of interest in the investment world," Mr. Ward said. "We expect a lot more activity, we expect more entrants and we do expect all of the current participants and platforms to grow very rapidly in the coming years."
Several specialty-focused DSOs and MSOs have expanded their networks with oral surgery practices and prepped themselves for continued growth.
Irving, Texas-based U.S. Oral Surgery Management gained a $150 million credit expansion to support its growth beyond 2024. The organization has added about 15 practices in several states so far this year.
Birmingham, Ala.-based HighFive Healthcare also secured a $100 million growth investment in June.
HighFive Healthcare is an endodontics and oral surgery-focused dental partnership organization that doubled its number of practices in 2022. The DSO plans to use the investment to continue its acquisitions and expansion across the Southeast U.S.