Gentle Dental Announces 11 Acquisitions

Gentle Dental Services Corp., a dental management company, said Tuesday that it has made 11 acquisitions in Southern California and Nevada as part of its ongoing plan to expand across the U.S.

“Our goal is to continue to build our leadership position in the Western U.S. and . . . to achieve national market leadership in dental management services,” said Michael Fiore, chairman, chief executive and president of Gentle Dental.

In October, El Segundo-based Gentle Dental agreed to merge with Dental Care Alliance in Sarasota, Fla., in an $80-million stock deal, which is expected to close within 30 days. Like Gentle Dental, Dental Care provides management services to dental practices.

After the merger, the new company, which has yet to be named, would operate in 11 states and would own or manage more than 180 locations that have patient revenue of more than $200 million. Fiore would be chief executive of the combined company.

Analysts were positive about the acquisitions announced Tuesday in light of the pending merger.

“The recent acquisitions are going to be important because you need some size,” said Roxanne Cheng, an analyst with Wedbush Morgan Securities in Los Angeles. “There is a consolidation among dental practices. You need to establish more of a presence in existing markets.”

Shares of Gentle Dental, which went public in February 1997, fell 13 cents to close at $7.38 on the Nasdaq Small-Cap Market.

Terms of the deals announced Tuesday were not disclosed. They were acquisitions of dental practices made in four transactions since Dec. 1.

Five of the offices are in the Las Vegas area--a new market for Gentle Dental, which manages locations in California, Oregon, Washington, Idaho and Hawaii that generate $150 million in patient revenue.

“Las Vegas is obviously a very interesting market,” Fiore said. “It’s growing rapidly, the demographics are strong, and there are the socioeconomic factors that led to us being interested in providing dental services there.”

The remaining six are in Southern California, adding to the 12 offices Gentle Dental already owns here.

“Our strategy will be to fill in the markets we’re already in with additional offices. It’s more economical if you cluster offices in a geographic area,” Fiore said.

The company is looking into expanding into Arizona, Utah and Colorado, he added.