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How PlusDental failed to achieve its unicorn dreams, and STMN acquired it for a discounted Price?

Excerpt from our Research Report

Recently, Straumann Holdings announced its plans to acquire PlusDental at an acquisition deal price of USD 140 million. This deal value represents a wide chasm against the company's projected valuation ambition, announced in Mid-2021. Not long ago, PlusDental's Co-CEO talked about exceeding USD 1 billion in valuation before Mid-2022. However, the recent deal value is an indication that the company has failed to deliver on its growth story.

This acquisition deal represents a seismic shift in the way clear aligner brands are valued and sold. In other words, the irrational exuberance about strategic importance of acquiring clear aligner brands, vague growth stories and poor post-merger integration skills have given way to new valuation approaches.

Acquirers are not willing to pay high premiums for emerging clear aligner brands anymore. That’s not all, the deal value and precedent financing rounds also make it clear that the acquisition premium was almost non-existent (USD 90 million cumulatively were injected into the company in all precedent financing rounds combined).

Based on insightsZ research, this shift was driven by STMN’s learnings in the last few years – especially the challenges that the Basel-based company had to encounter in delivering its growth plans for its clear aligner brand DrSmile.

Concerning the PlusDental acquisition deal:

  • The deal amount (USD 140 M) represented less than 1 percent of STMN’s market cap (estimated at USD 17.5 billion; two days before the deal announcement). In other words, Straumann Holdings’ risk exposure is fairly small.

  • Looking back, PlusDental failed to achieve its internal revenue target of USD 100 million in FY 21. Not just that, the company’s valuation was down by 86 percent (versus its expected valuation projection by Mid-2022).

To read the complete report, please refer to our Research section here (available for registered members only). If you will like to become a client, please contact us.

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