Carestream Dental Files Prospectus for Spin-off to Become Independent Global Provider of Imaging Systems and Software Services for Dental Clinics
Recently, Carestream Health disclosed to VCBeat that it has partnered with its parent company, Onex Corporation, and entered into an agreement to sell its dental digital business to funds managed by Clayton, Dubilier & Rice (CD&R) and Hillhouse Capital/Synova Partners.
CD&R is a global private equity investment firm founded in 1978. Since its inception, CD&R has invested over $22 billion in 72 companies across numerous industries, with the total transaction value of these deals reaching up to $100 billion.
Shinbai Capital is a specialized investment platform focused on the Asian dental and consumer health sectors, and it is a member of Hillhouse Capital Group. Shinbai Capital’s dental portfolio encompasses digital dentistry, specialty dental clinics, clinic management software, dental distribution networks, oral care, professional dental training, and online dental marketing. The newly independent company will be named Carestream Dental.
Carestream’s dental digital business provides imaging systems and practice management software for general and specialty clinics worldwide, earning a strong market reputation in the attractive, high-growth oral healthcare market and establishing a solid foundation for sustained growth and success.
CD&R and Hillhouse Capital/PineBridge Investments are partnering with the Carestream Dental team to further leverage Carestream’s strengths and accelerate growth.
Notably, the agreement signed this time does not include dental X-ray films and anesthetics; Carestream Health will retain this portion of its business.
Carestream Dental President Lisa Ashby will serve as CEO of the new independent company following the completion of the transaction.
“This is a significant milestone for Carestream Dental, bringing exciting growth to the company,” said Ms. Ashby. “With the strong support of our new partners, we look forward to more effectively leveraging product innovation, high-quality services, and our unwavering commitment to excellence to meet the evolving needs of the global oral healthcare industry.”
Derek Strum, Partner at CD&R, stated: “Our investment in Carestream Dental fully leverages CD&R’s expertise in executing complex corporate spin-offs to unlock significant transformation and growth potential. We are delighted to invest in a company with a strong team foundation and a globally leading brand, operating in a continuously growing market that aligns with technological trends, and to partner with Syno Dental. With multiple dental business platforms in China, Syno Dental is well-positioned to help Carestream Dental expand its footprint in emerging markets.”
Mr. Feng Dai, Partner at Hillhouse Capital and Songbo Investment, stated, “Carestream Dental boasts a strong brand heritage, excellent products and technologies, as well as outstanding and dedicated talent in emerging markets. We are honored to support the company in further advancing its emerging market strategy.”
Following its establishment, Carestream Dental will first work with CD&R and Hillhouse Capital/SPC Investment to ensure a smooth transition for its dental digital business team and customers. It will also be committed to sustaining the success and enhancing the competitive advantage of its remaining businesses, including: medical imaging equipment, healthcare IT solutions, medical and dental films, non-destructive testing (NDT) films and imaging systems, as well as precision films and contract coating services.
These attractive market operations will generate substantial revenue and cash flow, which can be used to support recent investments in technological innovation and growth initiatives.
“Driven by passion, a spirit of innovation, and a customer-centric philosophy, our dental digital business team has established a market-leading position. I am delighted that Lisa and her team now have the opportunity to build an independent, globally leading oral healthcare company,” said Kevin Hobert, CEO of Carestream. “With innovative new products and services across every segment of our other businesses, we aim to concentrate our resources and energy on our most significant growth opportunities.”
Subject to regulatory and other approvals, the sale is expected to close in the third quarter. Given that such transactions in France require consultation with the Works Council, Carestream will not incur any legal obligation to divest the business until such consultation is completed. Other terms of the transaction were not disclosed. Jefferies Group LLC served as Carestream’s exclusive financial advisor in this transaction.