Sirona sold for $700 million

Six years after its successful spin-off from the Siemens conglomerate, ownership of Sirona Dental Systems has changed hands. The company was acquired late last year for a healthy premium by a group comprising its top management team and EQT, a private equity group from Scandanavia.

The sale price of Euro 412 million (approx. A$700 million) represents more than a doubling of Sirona's market value during the past six years and is attributed to significantly increased sales and financial performance.

While some industry diehards predicted that a non-dental investor could not successfully run a dental business when Permira, a UK private equity group took on the challenge in 1997 of making the dental equipment manufacturing arm of a huge multinational stand alone, they have since been proven wrong.

The objective influence of outsiders has seen the introduction of new treatment centres that cater to all budgets (C1+ to C8+), the blossoming of the CEREC CAD/CAM restoration system with the release of the "3", "inLAB" and now the CEREC 3D which have accelerated acceptance of CAD/CAM chairside dentistry enormously with over 10,000 units sold, as well as the introduction of new products, both through R&D and acquisition. Significantly, a beach-head into the expansive US market, which Siemens had hoped to establish through its acquisition of Pelton and Crane but never quite accomplished, has now been made with the Sirona brand, spearheaded by CEREC.

According to industry analysts, Sirona's operational efficiency is now a benchmark for the dental manufacturing industry. Moreover, their innovative product range provides them with exceptionally strong growth potential for the future.

"The involvement of EQT will strengthen Sirona's current market position," said Friedrich Schnetzer, Sirona's South East Asia sales manager. "Like Permira, they are professional and successful business investors who can provide us with a broader business perspective, and ready access to capital to fuel our growth.

"This is likely to be a combination of internal growth through increased R&D investment and the potential acquisition of strategic businesses that complement our broad-based product concept. Encompassing all of our efforts will be a strong commitment to providing high levels of customer satisfaction."

According to Mr Schnetzer, customers in Australasia will benefit from faster product development cycles and greater integration of contemporary technology within the company’s product range. Sirona’s emphasis will continue to be on delivering quality products that improve practice efficiency and patient care. "The recent addition of implant and endodontic devices to our product range is one example of how we meet customer demands for technological solutions that enable them to deliver state-of-the-art dentistry," he said.

"A change in ownership is an opportunity to incorporate new ideas and review where we can do things better. Unlike the last time however, the senior management of the business remain in place and now have considerable equity in the business, which shows their absolute confidence in our future, plus their personal commitment to our continued success. We welcome the continuity this provides to us and our business partners, such as Halas Dental in Australia and Shalfoon Dental in New Zealand."

In related news, Henry Schein's European arm has acquired Demedis, the former dental product distribution arm of Siemens that was sold-off as a separate business when Siemens divested all of its dental interests around the time of Sirona being established. Similarly, Pelton and Crane, mentioned earlier, was sold to DCI. Neither Demedis nor Pelton and Crane were ever part of Sirona.