April 8, 2025


North America

By Ricky Roman, Cathay Capital

The dental industry has become an enormous market, estimated at $155 billion and growing steadily at roughly four percent annually. However, the industry is undergoing significant change. 

Facing staffing shortages and rising costs, the dental industry has been consolidating, giving rise to Dental Service Organizations (DSOs). By consolidating practices under one umbrella, the DSO creates a larger business platform capable of faster growth and increased returns. However, despite prior consolidation, the market remains highly fragmented.

At Cathay Capital, we built our global investment firm to help companies from North America, Europe, Asia, Latam to Africa navigate the opportunities of expansion and sustainable transformation to make a positive impact. One area we’ve been keenly interested in is dentistry, given its critical nature and impact on overall health.

Enter Parkview Dental Partners – Operating in a Dynamic Geographic Market with Robust Growth

We’re particularly excited about our investment in DSO Parkview Dental Partners. Although the investment occurred in October 2023 and was our inaugural North American investment from our Growth Private Equity Fund (Small Cap IV), the company has recently announced four acquisitions, accelerating its expansion in Florida’s $9 billion dental services market.

Founded in 2018 in Sarasota, Florida, Parkview is a DSO that currently manages 25 dental practices that provide general and specialty dentistry. Parkview operates in the dynamic Southwest Florida market, characterized by population growth at 3x the national average, an aging population with higher dental care needs, and robust GDP growth.  

During 2021 and 2022, many deals were done in dental services at peak multiples, many with aggressively leveraged capital structures, far above where deals had traded historically. As interest rates increased, those capital structures became more expensive to maintain while it simultaneously became more costly to grow using debt-financed add-on acquisitions. The interest rate increase also compressed valuation multiples, and when Cathay Capital invested in Parkview Dental a year ago, the dental sector was still largely out of favor. At the time, most private equity firms showed little interest and many were hesitant to engage with the industry. 

However, Cathay Capital sought out strong long-term industry fundamentals and believed that finding a company with the right geographic focus, strong doctor relationships, and operational expertise would buck the trend and mitigate the challenges many other DSOs were experiencing. 

To help find the right company to back, we partnered with our now Operating Partner, Rene Sauerteig, and we started aggressively hunting for an acquisition. Key to our thesis was identifying the right location with strong population fundamentals, high fragmentation, and being able to find a company that wanted to operate as an integrated business, not just a group of separate dental practices cobbled together. Through our sourcing efforts, we found Parkview Dental Partners with strong density in West Florida.

Their geographic concentration in the dynamic Southwest Florida market, with its high growth, presented a unique opportunity. Parkview’s strong relationship focus, evidenced by low staff turnover and a satisfied patient base, was also compelling. Finally, their operational focus, demonstrated by their desire to be a well-run integrated set of practices aligned perfectly with our approach of driving operational discipline.

Parting Thoughts — the Fundamentals & Integration Are Paying Off

Sticking to our fundamental analyses while other investors were risk-averse has paid off. We are currently growing our business at approximately 10 percent organically year over year, roughly twice the industry average. We are doing an acquisition per month as the preferred partner to dentists in West Florida, while many other competitors are having to deal with unfavorable capital structures, limiting their ability to capitalize on strategic add-on acquisitions. 

Parkview is well on its way to being the market leader in West Florida while continuing to provide top-notch clinical care to patients. We are still in growth mode, with the attainable goal of becoming the best DSO in the United States. 

Read more on the Parkview journey below:

Cathay Capital Announces Investment in Parkview Dental Partners

Rene Sauerteig Joins Cathay Capital as Operating Partner and Board Member of Parkview Dental Partner

Parkview Dental Partners Acquires Two Lifetime Smiles Dental Care Practices

Parkview Dental Acquires Periodontics & Dental Implants Practice of Dr Douglas Wendt; Brings on New Partner Dr. Ken Ross