BNS Scotia Capital analyst Patricia Baker resumed coverage of Dentalcorp Holdings Ltd. (DNTL-T) following its $115-million bought deal with a “sector outperform” rating and $19 target, down from $20 and below the $20.36 average.
“DNTL has an established reputation as an acquirer of choice in the Canadian dental practice market and provides a compelling value proposition to selling dentists,” she said. “Selling dentists are freed from administrative burdens, maintain clinical autonomy, gain access to DNTL’s technology and expertise, and participate in any potential upside through performance-based compensation. Growing the practice is supported by DNTL’s technology platform and operating capabilities. Additionally, partner dentists, as shareholders, can benefit from growth across the network through share ownership. DNTL has a solid track record of completing successful mergers and acquisitions (M&A), and with each acquisition, DNTL leverages its scale and centralized operating and purchasing efficiencies to increase cost and revenue synergies. The pipeline for ongoing M&A activity is robust and in fact DNTL is accelerating the pace of growth. We believe DNTL’s heightened profile as a public company as well as the challenges faced by dental practices throughout the pandemic have both contributed to a higher level of activity.”