Peloton Capital Management Signs First Deal with 123Dentist

TORONTO – June 27, 2019 – Peloton Capital Management (PCM), a Canadian private equity firm with a long-term approach to middle-market buyouts in the North American market, today announced that it has made an investment of C$75 million in 123Dentist, the largest majority Canadian-owned network of dental practices. The majority of the capital will be invested upfront, with the balance available to 123Dentist in the form of an equity line of credit. Capital provided by PCM will support 123Dentist’s expansion across Canada to complement its existing network of over 70 practices in Ontario, British Columbia, Alberta, Manitoba, and Quebec; and further strengthen its back office, marketing, and operational capabilities for its practice partners.

The investment in 123Dentist comes on the heels of the first close of PCM’s first fund (PCM Fund I) with C$330M in aggregate commitments. PCM’s first close took place in mid-March, less than six months after the firm’s launch and within three months of formally launching fundraising. The close takes PCM to more than 65% of its fundraising target and enables the firm to accelerate its deal sourcing and team expansion efforts. In addition to a significant anchor commitment from Stephen Smith, Chairman of PCM, the firm received support from a number of Canada’s leading financial institutions, family offices, and individual investors.

“Completing a first close in a short period of time with backing from a top tier group of investors that brings us to two-thirds of our target fund size, is a testament to our blue-chip team, and confirms that our sector focus, and long-term investment approach is resonating with investors,” said Mike Murray, Managing Partner of PCM.

Peloton Investment in the Largest Canadian Owned Network of Dental Practices

123Dentist is a Canadian owned and operated business that was built by dentists for dentists. It has been providing dentists in key markets across the country, and at any stage of their careers, with a tailored and sustainable partnership and transition model that also supports full clinical autonomy. 123Dentist aligns with the individual needs of each dentist partner to deliver on its core promises of practice-by-practice flexibility and long-term partnership solutions that reflect the unique needs of each dentist partner.

“As our first deal, this investment in 123Dentist is a significant milestone for the PCM team. It shows our progress since launching, and establishes PCM as an active private equity firm that can source and execute attractive investments that not only align with the key aspects of our investment strategy but also reinforce our core differentiators in the market,” said Steve Faraone, Managing Partner at PCM. “We’ve structured this investment to ensure 123Dentist has the runway it needs to execute on its vision of establishing the business as a national platform, supporting a network of successful dental practices with excellent patient care at its core.”

The 123Dentist model and platform closely aligns with PCM’s investment strategy. 123Dentist, a founder-controlled business, was seeking a long-term, knowledgeable Canadian partner with deep relationships to support an aggressive buy-and-build partnership strategy. The PCM team brings deep sector expertise, having previously led the acquisition of Heartland Dental, the largest network of dental practices in the United States. 123Dentist also embraces “structural flexibility” in partnering with dentists, much in the same way that Peloton has established its relationship with Dr. Amin Shivji, CEO of 123Dentist.

RBC Capital Markets acted as exclusive financial advisor to PCM on the transaction.

 

Peloton Expands Advisory Board and Team

PCM has also expanded its Advisory Board — which is chaired by Jim Leech, Chancellor of Queen’s University and former CEO of Ontario Teachers’ Pension Plan — with the appointment of Irene Chang Britt, a highly accomplished executive with deep experience in corporate governance and the consumer packaged goods sector. Irene has held leadership roles at numerous blue chip firms including Campbells Soup Company, Kraft Foods, and Kimberly-Clark, and has also served as an independent director at Dunkin Brands, Baybridge Senior Living, and Brighthouse Financial.

“Irene is a sought-after and accomplished business executive with extensive expertise in the world of consumer products and services. We recognize how valuable her time is and appreciate how fortunate we are to have her on our team,” said Murray. “Of course, the fact that she was once a competitive cyclist means that she, better than most, understands the concept of a Peloton, and the namesake strategy we have embraced.”

The PCM team has grown to include several new executives who have previously held roles at blue chip firms such as Onex, RBC Capital Markets, Deloitte, and Clairvest Group. Among the new additions to the team are: Mike Scarola, Partner; Nora Nestor, CFO; Blake Bracalenti, Vice President; Sam Kogan, Vice President; James MacVicar, Associate; and Patrick Smith, Analyst.

 

About Peloton Capital Management

Peloton Capital Management is a private equity firm that uses a long-term investment philosophy and sector-focused strategy in building a portfolio of North American companies that present compelling opportunities for value creation. Headquartered in Toronto, the company is led by a blue-chip team of partners with extensive private equity experience. For more information please visit: pelotoncapitalmanagement.com.

 

About 123Dentist

The 123Dentist National Platform was launched in July 2017. The company is a majority dentist-owned, Canadian dental support organization with practices across the country and offices in Vancouver and Toronto. Dr. Amin Shivji is the CEO and an experienced operator of dental practices, having opened his first practice in 1993. 123Dentist enables dentists to focus on providing optimal care to their patients, while an experienced team provides a wide range of support services. 123Dentist offers different partnership models to meet the unique needs of each individual dentist, including the opportunity to retain a minority interest. For additional information, dentists can visit doctors.123dentist.com and patients can learn more at 123dentist.com.

Michael Murray