dentalcorp Holdings Ltd T.DNTL

Alternate Symbol(s): DNTCF

Healthcare

dentalcorp Holdings Ltd. is a Canada-based consumer healthcare services company and provider of dental services in Canada. The principal activity of the Company, through its subsidiaries, is to provide health care services by acquiring and partnering with dental practices in Canada. It operates a network of over 551 dental practices, delivering patient experiences to over 2.3 million Canadians. Its network includes over 1,850 dentists, over 2,500 hygienists and over 5,550 auxiliary dental health professionals. Its wholly owned subsidiaries include dentalcorp Health Services Ltd., MWHE Holding Corp., 9520-3048 Quebec Inc. and 1348856 B.C. Ltd.

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dentalcorp Holdings Ltd > RBC

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Post by retiredcfon Nov 22, 2022 9:05am

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Post# 35118204

RBC

November 21, 2022

dentalcorp Holdings Ltd.
Announces commencement of strategic review process

TSX: DNTL | CAD 6.07 | Outperform | Price Target CAD 15.00

Sentiment: Positive

Our view: DNTL announced the commencement of a strategic review process to unlock shareholder value. The company has received unsolicited expressions of interest. The company's board has formed a special committee of non-executive, independent directors in consultation with its financial and legal advisors to undertake a review and evaluation of strategic alternatives to the company to unlock shareholder value. The CEO noted "management team is fully aligned with the Board's decision to explore options to maximize shareholder value, including in response to unsolicited expressions of interest that have been received." dentalcorp does not currently intend to provide any updates with respect to this process unless and until its BoD approves a specific transaction or otherwise concludes its review of strategic alternatives. In our view, the decision to conduct a strategic review process is likely due to the significant decline of the stock (-63% ytd) and de-rating of the stock vs. peers.

Valuations: The stock is currently trading at 8.5x 2023E IFRS EBITDA and 8.9x 2023E GAAP adj. EBITDA. Relative to US & Canadian peers (on a US GAAP and IFRS basis), dentalcorp appears to trade at the lower end of the range of peers.

Shareholders: We note that L Catterton (39.7% of outstanding shares; 27.5% voting rights) and Graham Rosenberg, CEO (5.3% of outstanding shares; 34.6% voting rights) together hold 45.00% of outstanding shares and 62.10% of the voting rights.