Several DSOs specializing in oral and maxillofacial surgery have landed additional funding in recent years as investors continue to see the field for its growth potential.
Hackensack, N.J.-based Max Surgical Specialty Management secured a $77 million senior credit facility in April to fuel the company’s expansion. Mark Censoprano, co-CEO at MAX, told Becker’s the credit facility will help the organization increase its partnerships in the Northeast.
“We’re in a great position because we already have a wonderfully active pipeline of conversations,” he said. “You don’t want to count your eggs before they’re hatched, but we have enough great conversations happening with very strong premier oral surgeons in the Northeast that this credit facility will continue to allow us to do what we need to do. We could be in a position that we will be able to form partnerships that will leverage that entire facility in the not too distant future, if things go well.”
Cumming, Ga.-based OMS360 has expanded in several states this year, and aims to continue its expansion after obtaining a credit facility from TPG Twin Brook Capital Partners in May.
Robert Clark, DMD, a member of OMS360’s board of directors, told Becker’s that many investors have taken notice of advantages the OMS specialty offers after focusing on general dentistry and other specialties for several years.
“Oral surgery is a relatively high-reimbursement, high-production [specialty] … I think they saw the opportunity of a practice modality that was largely untouched by private equity and management companies,” he said. “It’s a great specialty for people who want to work hard, it allows you to produce and to maintain your lifestyle, have a family life, but also it’s something that is financially lucrative and professionally fulfilling, particularly if you want to do the surgical side.”
Southlake, Texas-based Allied OMS has received two investments in recent years to fuel its expansion efforts. After closing on a $116 million credit facility last year, the organization landed a minority investment in June to further expand its service offerings, complete acquisitions and scale operations.
Allied OMS Founder and CEO Daniel Hosler said the two deals highlight the continuous demand for specialty services and the industry’s potential for financial stability.
“This tends to be a pretty recession-resilient business. We deal in acute, episodic care. What I mean by that is, frequently, we don’t do anything that’s more routine. It all tends to be a terminal referral, so you crack a tooth, you have a failed root canal, or you have an accident where maybe you lose teeth or fracture the jaw,” he said. “Our doctors and surgeons are being called in to provide those services … I think it’s that immediate ability to resolve a painful issue that makes this a very resilient business model.”
Mr. Hosler said the financial backing puts the company in a position for continued success compared to other DSOs who may not have the same financial leverage.
“One of the things that makes us really excited about our equity partnership and our new debt providers is that they are looking at this as a really great growth opportunity. We are taking a, sometimes I call it a boring approach, which is sticking to our knitting. We’re sort of over-equitized, which means we can be aggressive when we need to be,” he said. “For those other DSOs out there, anything you can do to try to resolve some of those issues will probably put you back in a position where you can get back to enhancing patient care, enhancing care delivery and helping those doctors and dentists grow.”
