Early in March, Welsh, Carson, Anderson & Stowe (WCAS), a private equity firm based in New York, announced that it was acquiring the majority stake in LIBERTY Dental Plan Corporation. Anthem, Inc. (NYSE: ANTM), a leading health company and a LIBERTY customer since 2010, will also become a minority investor. The terms of the deal were not disclosed.
LIBERTY is a dental benefits administrator founded by dentists and health industry professionals in 2002. LIBERTY currently administers dental benefits in all 50 states, including on behalf of 5.8 million Medicaid, Medicare Advantage, commercial and exchange members. It was founded in 2001.
Established in 1979, Welsh, Carson, Anderson & Stowe (WCAS) is a leading American private equity firm focused on two target industries: technology and healthcare. The firm has raised and managed funds totaling over $30 billion of committed capital.
Anthem, Inc. provides health insurance in the United States and is the largest for-profit managed health care company in the Blue Cross Blue Shield Association. Through its affiliated companies, Anthem serves more than 117 million people, including more than 45 million within its group of health plans.
The transaction is expected to close later this year after customary regulatory reviews. Cain Brothers and Macquarie Capital served as financial advisors, and Debevoise & Plimpton LLP acted as legal advisor for LIBERTY. Sidley Austin LLP acted as legal advisor for WCAS, and Faegre Drinker Biddle & Reath LLP acted as legal advisor for Anthem.
This acquisition is the fourth Dental Service Organization to occur in 2022. In January, Spark Dental Management acquired Children’s Dental Management and Thomas H. Lee Partners & Frazier Healthcare Partners invested in Smile Doctors, LLC. In February, Community Dental Partners purchased OrthoDent Management, LLC. None of the prices were disclosed, yet all the acquirers are private equity companies. This is interesting to note because it truly highlights a trend that we here at Irving Levin have noted many times; Physician Medical Groups is a lucrative and active sector, attracting plenty of capital.
