Great Expressions sponsor Roark provides equity injection as COVID hampers dental services industry

14 May 2020 - 01:52 pm UTC

by Bill Weisbrod and Deborah Balshem

Great Expressions Dental Centers (GEDC) recently received a USD 10m equity injection from sponsor Roark Capital Group, according to two sources familiar with the situation.



The funding gives GEDC a much-needed jolt of liquidity, as the company’s revenues have declined, with visits to non-essential healthcare services providers being curtailed amid the COVID-19 environment, the sources added.



The transaction was completed within the past month, one of the sources noted.



Even before national quarantine measures came into effect, the company was struggling due in part to issues associated with integrating newly acquired dental practices. Roark put USD 25m of equity into GEDC last year to cure a potential covenant breach.



The company’s debt stack consists of an Ares-led USD 410m credit facility, issued in 2016 to back Roark’s buyout. The LBO valued the company at USD 700m, as reported.



Business development company Ares Capital Corp marked a USD 13.7m position in GEDC’s L+300bps/2.75 PIK revolver due September 2022 at 86% of par as of 31 March, according to SEC filings. It marked a USD 94.9m position in the company’s second-lien term loan due March 2024 at 70% of par, while not paying interest.



Michigan-based GEDC operates over 300 locations, up from about 270 at the time of the Roark acquisition. Its services include general dentistry, cosmetic procedures and orthodontics.

 

The company shuffled its management team last year, hiring former Cancer Treatment Centers of America COO Adesh Ramchandran as CEO to replace Dan Hirschfeld, after an 18-month tenure.



GEDC, Roark and Ares did not respond to requests for comment.