DNTL dentalcorp Holdings Ltd

dentalcorp Holdings Ltd. ("dentalcorp" or the "Company") (TSX: DNTL), Canada's largest and fastest growing network of dental practices, today announced that it has entered into an agreement with a syndicate of underwriters (the “Underwriters”), led by CIBC Capital Markets, BMO Capital Markets and TD Securities Inc., who have agreed to purchase, on a "bought deal" basis, 6,135,000 subordinate voting shares (the “Shares”) of the Company from treasury at a price of $16.30 per Share for gross proceeds to the Company of approximately $100.0 million (the “Offering”).

The Underwriters have been granted an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part on the same terms as the Offering for a period of 30 days from the closing of the Offering, to issue additional Shares, representing up to 15% of the size of the Offering, for additional gross proceeds of up to approximately $15.0 million.

The Company intends to use the net proceeds of the Offering to support its acquisition program, which accelerated in the latter half of 2021 and is expected to remain strong in 2022.

dentalcorp is also providing an M&A update for 2021 and is providing an estimate of the revenue and Adjusted EBITDA margin that it expects to report for the fourth quarter of 2021.  

M&A Update

During 2021, dentalcorp completed 62 acquisitions, representing 67 additional locations. Based on management’s preliminary estimates, these 62 acquisitions are expected to represent more than $43 million in 2021 PF Adjusted EBITDA.

“We continued to execute on our growth strategy of accretive acquisitions in 2021, with the 2021 PF Adjusted EBITDA that we expect to report for our 2021 acquisitions exceeding our expectations at the time of our IPO by more than 20%,” said Graham Rosenberg, Founder and Chief Executive Officer. “This equity raise will support our acquisition program, which accelerated in the latter half of 2021, in part from our increased investment in live engagement with prospects, which supported the expansion and the conversion of our acquisition pipeline. We are beginning 2022 with a robust pipeline and a high degree of conviction in delivering another very strong year of acquisitive growth, providing us with the privilege of delivering great patient care to more Canadians coast-to-coast.”

Preliminary Fourth Quarter 2021 Results

Based on management’s preliminary estimates, the Company expects that it will report revenue for the fourth quarter of 2021 that is approximately 20% higher than for the same period in 2020, and the Company also anticipates that it will report Adjusted EBITDA margin that is substantially consistent with its recently reported quarterly results.

“Despite Omicron, our fourth quarter 2021 revenues are expected to increase over the third quarter of 2021, with a return to sequential quarterly growth underpinned by solid same-practice sales growth and strong acquisitive growth. We continue to demonstrate dentalcorp’s resilience during waves of COVID variants and we remain focussed on continuing to grow our business organically, while expanding margins over the medium term,” continued Mr. Rosenberg.

dentalcorp will report its complete audited financial results for the fourth quarter and full-year 2021 in March.

Additional Equity Financing Details

The Shares issued pursuant to the Offering and Over-Allotment Option will be offered in all provinces and territories of Canada by way of a prospectus supplement to a short form base shelf prospectus (the “Final Base Shelf Prospectus”). The Shares issued pursuant to the Offering will also be offered in the United States by way of private placement to “qualified institutional buyers” in reliance upon the exemption from registration provided by Rule 144A under the U.S. Securities Act of 1933 (the “U.S. Securities Act”).

The Company will file a preliminary short form base shelf prospectus (the “Preliminary Base Shelf Prospectus”) no later than January 7, 2022. Such Preliminary Base Shelf Prospectus, which remains subject to the review of the Canadian Securities Commissions, will qualify the distribution by way of prospectus in Canada of up to $1.25 billion of subordinate voting shares, preferred shares, debt securities, warrants, subscription receipts, share purchase contracts, units or any combination thereof, during the 25-month period during which the Final Base Shelf Prospectus will be effective. The Company will also file a preliminary prospectus supplement no later than January 7, 2022 to qualify the Shares to be issued pursuant to the Offering described above.

The issuance of the Shares pursuant to the Offering is subject to customary approvals of applicable securities regulatory authorities, including the Toronto Stock Exchange (the “TSX”). Closing of the Offering is expected to occur on or about January 19, 2022 (the “Closing Date”).

No securities regulatory authority has either approved or disapproved the contents of this press release. The Shares have not been, and will not be, registered under the U.S. Securities Act, or any state securities laws. Accordingly, the Shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About dentalcorpdentalcorp is Canada's largest and fastest growing network of dental practices, committed to advancing the overall well-being of Canadians by delivering the best clinical outcomes and unforgettable experiences. dentalcorp acquires leading dental practices, uniting them in a common goal: to be Canada's most trusted healthcare network. Leveraging its industry-leading technology, know-how and scale, dentalcorp offers professionals the unique opportunity to retain their clinical autonomy while unlocking their potential for future growth. To learn more, visit dentalcorp.ca

Forward Looking StatementsThis news release may contain forward-looking information within the meaning of applicable securities laws, which reflects the Company's current expectations regarding future events, including statements with regards to the Company's future growth, performance and business prospects, future business plans and opportunities. This forward-looking information includes but is not limited to the Company’s expectations regarding the Offering (including the anticipated timing and use of proceeds therefrom); and the 2021 PF Adjusted EBITDA that the Company expects to report in respect of its 2021 acquisitions and the Q4 2021 revenue and Adjusted EBITDA margin that the Company expects to report (collectively, the “Financial Reporting Expectations”). Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control. Such risks and uncertainties include, but are not limited to, the impact of COVID-19 (including the omicron variant) and the other factors discussed under "Risk Factors" in the Company's Supplemented PREP Prospectus dated May 20, 2021, filed on SEDAR. Actual results could differ materially from those projected herein. In particular, it should be noted that because the Company has not yet completed its financial closing process for 2021, the Financial Reporting Expectations are preliminary, unaudited estimates and subject to change. These estimates have been prepared by, and are the responsibility of, the Company’s management and have not been reviewed by any third party. The Company’s actual results may differ materially from these estimates due to the completion of the Company’s financial closing procedures, financial adjustments, review by the Company’s auditors and other developments that may arise between now and the time the financial results are finalized. These estimates should not be viewed as a substitute for full financial statements prepared in accordance with IFRS, and these estimates are not necessarily indicative of the results to be achieved for the three months or year ended December 31, 2021 or any other period. The Company does not undertake any obligation to update the forward-looking information included in this news release, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

For more information contact:media@dentalcorp.ca

For investor inquiries, please contact: 416.558.8338 x 116, investors@dentalcorp.ca

SOURCE dentalcorp Holdings Ltd.

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1 2021 PF Adjusted EBITDA is a forward-looking non-IFRS financial measure. For further information on how this non-IFRS financial measure is calculated and used, and for a reconciliation to the most directly comparable financial measure that is disclosed in the Company’s financial statements (net loss and comprehensive loss), see "Overall Performance - Non-IFRS Measures" in the Company's Management Discussion and Analysis for the three and nine months ended Sept 30, 2021, which is incorporated by reference into this news release and is available on SEDAR at www.sedar.com. The Company’s PF Adjusted EBITDA, and net loss and comprehensive loss, for the 12 months ended September 30, 2021 were $210.9 million and $125.1 million, respectively.