11 February 2008
LGV Capital ("LGV") has sold its controlling shareholding interest in dental operator IDH Group Limited ("IDH"), the UK’s largest owner of dental practices, to Merrill Lynch Global Private Equity for an undisclosed amount.
Headquartered in Bolton, IDH is the largest company operating NHS dental practices in the UK with some 200 practices, 900 dentists and 1,700 employees. The business serves around 1.5m patients a year. Since LGV acquired its majority shareholding in 2006, the business has grown its total number of practices by more than a third through a number of acquisitions and new site openings. Acquisitions included that of Orthoworld in August 2007, which enabled the business to develop its activities in orthodontic care.
Merrill Lynch Global Private Equity will back the current management team of Andy Morris, Darrin Robinson, Lindsey Walker and Jo Weir, led by David Hudaly as Chief Executive.
The sale of LGV’s interests in IDH represents LGV’s third successful exit in a week, following the sales of Classic Hospitals and Verna Group. These businesses all operate within the healthcare market, one of LGV’s key sectors. In aggregate LGV has generated profits of £150m from these investments with gross proceeds of over £225m, representing a multiple of close to 3x cost.
Commenting on the transaction, David Hudaly, Chief Executive of IDH said: "LGV has been a supportive partner of our business throughout its period of investment, which coincided with a period of great change in our industry. In that time, the business has grown by a third, serving half a million more patients a year compared with the position before LGV became involved. We are grateful for its support."
Commenting on the transaction, Michael Mowlem, a Managing Director at LGV said: "IDH represented our fourth investment in the healthcare sector. We have backed the business during a period of significant growth and consolidated its position as leader in its market place through both organic growth and acquisitions. We would like to thank David, his senior management team and all the staff for their hard work in making this a successful investment for LGV but more importantly helping service the needs of the community providing professional and dental services. We are confident of their continued success."
Adrian Johnson, Chief Executive of LGV said: "We are delighted with such a successful outcome to a busy period in February for LGV with the sale of three high quality businesses in the healthcare sector. While the markets have proved turbulent in recent weeks, the resilience of this sector has been demonstrated through these transactions. "
LGV was advised by Hawkpoint Partners Limited and CMS Cameron McKenna LLP.
