Information on the Target

Alantra Private Equity Fund IV ("Alantra PEF IV") has acquired a majority stake in 13 dental laboratories, establishing the second-largest dental laboratory group in Spain. This newly formed group boasts combined sales of €20 million and specializes in fixed and removable prosthetics, aesthetic treatments, and orthodontic services. The current management of these laboratories has opted to reinvest in the venture, ensuring their continued involvement in operations post-acquisition.

Industry Overview in Spain

The dental laboratory sector in Spain operates within an €8 billion oral healthcare market, characterized by its fragmentation, with approximately 3,800 laboratories distributed across the country. This fragmentation presents significant growth potential, particularly in the digital laboratory segment, which is projected to catalyze market growth by tripling its size. Digitalized laboratories offer a unique value proposition, enhancing precision in designs and improving service excellence for both dentists and patients.

This sector primarily serves independent dental clinics, which generate around 80% of the revenues for these laboratories. The trend towards digitalization and innovation in artistry for dental solutions allows the sector to differentiate itself and attract more significant investment opportunities.

Given the advancements in technology and the growing consumer demand for personalized and efficient healthcare solutions, the dental laboratory segment is positioned for substantial growth. The upcoming potential market shifts driven by digitalization are creating an environment ripe for consolidation and expansion.

The Rationale Behind the Deal

This acquisition aligns seamlessly with Alantra Private Equity’s investment strategy, which identifies and targets family-owned companies with robust growth prospects. By investing in these dental laboratories, Alantra not only strengthens its presence in the burgeoning oral healthcare market but also opens avenues for further consolidation and geographic expansion into other European territories.

The ongoing commitment of the current laboratory directors underscores confidence in the future trajectory of the business, as their reinvestment reflects alignment in strategic visions aimed at maximizing market opportunities.

Information about the Investor

Alantra Private Equity, a prominent Spanish private equity firm, specializes in mid-market transactions across various sectors, notably in food and nutrition, healthcare, and industrial technology. The firm has a strategic focus on investing in family-owned businesses with high growth potential, leveraging a 30-year investment philosophy aimed at navigating markets both domestically and internationally.

Alantra PEF IV has secured commitments totaling €340 million, reflecting strong interest from institutional and private investors, of whom 80% have participated in previous funds managed by Alantra. The team's blend of private equity knowledge and management expertise is further complemented by the involvement of several operating partners who play a critical role in supporting portfolio companies.

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The acquisition of a majority stake in these dental laboratories appears to be a strategically sound investment for Alantra PEF IV, given the promising growth trajectories within the oral healthcare market. The digital transformation within the dental sector is expected to yield transformative results, further enhancing operational efficiencies and service offerings.

Moreover, the commitment from the existing management fosters a conducive environment for strategic growth and innovation. As the laboratories aim to expand to at least 25 locations while exploring additional European markets, the consolidation strategy can significantly strengthen market share and drive competitiveness.

Despite challenging fundraising conditions, Alantra's ability to attract substantial capital commitments underlines its strong market position and confidence among investors. This engagement strengthens Alantra's capability to execute its ambitious growth plans while contributing to the value creation in the sector.

In summary, this deal represents a well-calibrated opportunity for Alantra PEF IV that aligns with its investment philosophy and presents a platform for future growth, making it a potentially lucrative investment in the long run.

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