The prospectus shows that as of December 31, 2018, the company had a total debt of $1.1B, and total equity of $0.8B. These amounts gradually shifted to a total debt of $1.7B and a total equity of $0.6B by March 31, 2021. It has since reduced its debt and grown its equity to levels of $1.4B for total debt and $1.8B for equity. Dentalcorp enters into various agreements for its acquisition strategy, and it typically acquires all equipment and other major assets of the practice, using secured debt. DNTL typically acquires practices outright, integrating them into its network of clinics. Acquisitions vary, and in Q3 2023 it acquired three dental practices for $7.8M total.
It's uncertain whether Canada will implement a dental plan, and if so, we feel that DNTL can still benefit due to its large network and increasing scale.
DNTL went public at a tough time in the market, but it generates positive free cash flow, has a good cash balance, is growing its operations at a fast rate, and trades at a reasonable valuation. In the current market, however, investors are concerned about companies with high debt loads due to high interest rates.