Private equity firm Helix Investments has acquired a stake in dental services brand Dentzz, operated by SJ Healthcare Pvt. Ltd, through a secondary transaction.
US-headquartered Helix, which committed Rs 50 crore ($7 million at current exchange rate) for an undisclosed amount of stake, would use its expertise to boost the growth of Dentzz.
Dentzz has a growth rate of 30% annually resulting in healthy cash flows, said a statement from the fund.
The deal is structured such that all of the proceeds go to the promoters. Dentzz, on its part, is strengthening its brand and adding new facilities in India and outside.
Founded in 2005 by husband-wife doctor duo, Shantanu Jaradi and Karishma, the firm operates seven dental facilities in India and one in Dubai currently.
Chief executive Shantanu said, “There is an increasing demand for high-quality dentistry, full-mouth reconstruction treatments, and cosmetic dentistry in India. We identified this gap early and set out to create world-class dental facilities that attract clients from all over the world to India''.
A key focus area is the use of technology to improve predictability and accuracy of outcomes, he added. “Our cutting-edge equipment enables our doctors to perform an in-depth analysis early on in the process even before the treatment has begun,” said Karishma.
“Our technology and expertise allow us to treat even the most complicated cases in a seamless manner. We use some of the most advanced technologies globally available such as 3D CT-Scan, Digital Smile Design, T-Scan for bite accuracy and laser dentistry,'' she added.
The investor has struck more than a half-a-dozen deals, including three control transactions, in its over decade-long presence in the country.
It typically invests $5-15 million in a company in one go. The PE fund is backed by US-based Culbro LLC, the private investment vehicle of the Cullman and Bloomingdale families. Unlike most PE funds, Helix’s investments have no expiration date. It provides growth capital and strategic support to medium and small-size companies. Its previous India investments include Mahesh Tutorials and LearningMate.
“We chose to go with Helix as they could appreciate our vision for Dentzz. Being a families-controlled, families-run investment firm, we found Helix to be a like-minded partner with a similar value system. Helix offers us the long-term stability and partnership that is necessary for a business like ours,” said Shantanu.
He added, “This is our only dilution in 14 years of operations.”
This is the third investment for Helix in four years, and second in healthcare. “Healthcare is not a new area for us,” said David Danziger, managing partner, Helix US. “Apart from investments in India, we have invested in a medical equipment business based out of Charlotte, North Carolina,” he added.
Mid-last year, cybersecurity specialist Network Intelligence raised Rs 33 crore (around $4.8 million) in fresh capital from Helix.
Varun Didwania, director, Helix India, said, “With prohibitively high dental costs in developed markets and lack of comprehensive insurance, we see people continuing to flock to India. We believe the potential is huge as the market continues to grow at over 25% annually.”
Institutional investments in dental care started when India Equity Partners (IEP) bought a majority stake in New Delhi-based Axiss Dental Pvt. Ltd in 2012. That was the first major private equity transaction in India's dental care segment and set the stage for a few more venture capital and PE deals in the single-speciality vertical.
However, the initial euphoria in dental care investments has ebbed with investors either backing their existing portfolio companies or even exiting.
Dental care chains say the sector will rebound thanks to favourable demographics, rising awareness and improving access to healthcare facilities. Already, India's dentist-patient ratio has improved to 1:8,000 from 1:30,000 in 2004, government data showed in 2017.