The ability for a dental business to be "recession-resistant" could be an attractive factor for private equity firms seeking to invest in the dental industry, according to an Oct. 28 article from The Deal.
Colin Welch, a managing director with private equity firm TSG Consumer Partners, spoke with The Deal about the firm's September investment in Nashville, Tenn.-based Specialty Dental Brands.
Specialty Dental Brands supports more than 211 practices across 20 states.
Mr. Welch said the private equity firm looked into several dental practices but was attracted to the DSO's diverse business because it covers a mix of specialties, adding that it could hold up well if consumers cut discretionary spending.
When researching the dental sector, the firm found dental visits only suffered a "modest downturn" during the 2009 recession. The firm considered that orthodontic procedures are typically not delayed for youth patients and that Specialty Dental Brands serves patients from early childhood through the teenage years. It also took into consideration the $35 billion addressable market for specialty dental services.