Launch on ASX has dental firm smiling
GOLD-COAST based dental group Smiles Inclusive will debut on the ASX today following a $35 million initial public offering that saw it buy up small practices around the country.
Smiles Inclusive has acquired a portfolio of 52 practices under a partnership model with individual dentists who sell their clinics but remain investors in the business.
There are plans to expand the number of clinics to 500 within five years, making it the largest dental chain in the country.
Smiles joins a growing list of medically-related companies headed to the stock exchange to raise funds for expansion. Pacific Smiles and 1300Smiles are dental chains that have already listed on the ASX.
Brisbane-based MyFootDr, which runs a national chain of podiatrist clinics, is planning a listing this year.
Smiles Inclusive managing director Mike Timoney said dentists who had sold their clinics to the company had reinvested $21 million back into the firm to become joint venture partners. The company has acquired clinics in Queensland, New South Wales, Victoria, Western Australia and South Australia that will be rebadged as Totally Smiles practices.
Mr Timoney said the company’s business model was attractive to dentists who wanted to stay in the business but reduce their exposure to compliance and other risks.
“The fragmented health care system is not working anymore with growing compliance and consumer expectations,” said London-born Mr Timoney, who said he first became involved in the sector when he was married to a dentist.
“Things have changed since the average 50-year-old dentist first hung up his brass plaque. Now they are expected to be experts in social media, marketing, compliance and HR as well as keep up with the explosion in new dental technology.”
Under the business model, dentists reinvest 40 per cent of the proceeds of the sale of their clinic back into the business but can sell at a later date.
“Dental practitioners keep a continuing economic interest and profit share as partners,” said Mr Timoney, who founded the Totally Teeth dental practice and is cofounder of Dental Partners, now Maven Dental Group.
Mr Timoney said 65 per cent of Australians did not go to the dentist regularly, with cost and time constraints among the major reasons.
The IPO, which was underwritten by Morgans, was several times oversubscribed with strong interest from retail and institutional investors.