dentalcorp (DNTL) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Market overview and growth opportunities

• Canadian dental market is highly fragmented, with only about 7% consolidation and significant white space for expansion compared to the U.S.

• Market is nearly 100% cash pay, reducing administrative burden and providing favorable payer dynamics.

• Largest aggregator in Canada, with national coverage and a strong position for continued double-digit growth.

• CDCP rollout is expected to benefit the sector, with over 80% of practices enrolled and early positive impact on revenue growth.

• High recurring patient visits (92%) provide strong revenue visibility and planning accuracy.

M&A strategy and integration

• In-house business and corporate development teams source and execute deals, focusing on relationship-building and due diligence.

• Integration begins at LOI, with onboarding of staff, technology, and financial systems to ensure smooth transitions.

• Revenue synergies are driven by increasing patient visits, while immediate cost synergies come from centralized purchasing.

• Typical targets are multi-dentist, larger practices in tier one or two regions, with tuck-under programs for smaller practices.

• Acquisition multiples have remained stable (7–7.5x EBITDA), with a long runway for further consolidation.

Organic growth and operational efficiency

• Organic growth target of 4%+ is achieved through price (Fee Guide increases) and volume/insourcing initiatives like orthodontics and implants.

• Volume growth is driven by patient recall, education, and benefit utilization, outperforming the broader market.

• Practice cost structure is 75–80% variable, mainly staff and dentist compensation, providing margin stability in downturns.

• Operating leverage is limited due to high variable costs, but fixed costs like rent and utilities offer some efficiency gains.