By Danny Chan
Dental practice owners looking to be relieved of administrative responsibilities in order to concentrate on the clinical side of the business may welcome a win-win partnership offer by Dental Corporation.
Founded in 2007, Dental Corporation is the collective brainchild of entrepreneur Mark Evans and dentist Dr Ray Khouri. Seeing how dental practices are normally small but complex business entities with great earning capacity, they both realized the market potential of injecting corporate-style management knowhow into the businesses.
Says Mark Evans, Executive Chairman, Dental Corporation: “I was introduced to Ray Khouri in early 2007 and he was looking at opportunities to establish a corporate business in the dental space.
“After we analysed the market, we saw an opportunity to do something different and create a partnership model. It was built around our own experiences in business and our belief that “once you work for yourself, you would need to retain autonomy even if you were part of a larger group”.
The business concept revolves around a partnership model that would allow dentists to retain autonomy over their day-to-day operations at an individual practice level, while receiving the company’s management and back-office support.
“We bring an extensive and market-leading range of back-office services ranging from financial management and reporting through to IT, HR, marketing and patient communications. This allows our dentists to focus on the clinical and day-to-day practice operations.”
Opportunities for Synergistic Collaboration
Practice Principals who join the partnership scheme receive an initial payout at settlement, based on the assessed value of their practices, which includes a percentage of the value in Dental Corporation shares. Practice Principals are further remunerated on an incentive-based structure, for their work on patients and overseeing the profitable growth of the practice.
On the benefits of partnership, Mark explains: “A dental practice is a complicated small business requiring expertise in accounting and financial management, facilities management, sterilisation and equipment requirements, staff recruitment and management, IT and, obviously, clinical skill and care. Dentists, as the main revenue drivers who spend most of their day in the surgery attending to patients, are managing all this.
“We saw the opportunity to apply our business expertise in partnership with the dentists’ clinical expertise to create a win-win situation for both parties. I think in this area we have exceeded all our goals and now provide the quality of back-office service as good as anything that is available anywhere in the world.”
To date, the partnership model has attracted 172 practices, making Dental Corporation the largest dental provider in Australia and New Zealand. Meanwhile, the company generated turnover and net earnings in excess of $300 million and $45 million respectively.
“We target well-run dental practices, normally with multiple dentists or hygienists. The dentist in the practice has to be committed to the long-term future of his practice but seeking some realisation of the value they have created and looking to receive some administrative support.”
The Winning Entrepreneurial Spirit
Leveraging on its size and scope, Dental Corporation has successfully introduced management systems that reduce the operating costs and complexities of running a dental practice. Key developments include the creation of an online purchasing portal and other efficient, future-oriented systems.
In terms of staff training, the company established a training program that received applications from 80 per cent of dental graduates in Australia and New Zealand in its second year – of which 24 graduates are now employees.
“We are strong advocates of technology and growth within our practices. We support our staff who look to expand their horizons and build long-term careers in the dental industry. We believe that the up-skilling of our staff not only provides them with rewarding careers but leads to the best possible patient outcomes.”
In acknowledgment of his contributions, Mark recently received the Ernst & Young Entrepreneur Of The Year Award for Services (Australia, South region). The prestigious business award recognizes the entrepreneurial vision and leadership of successful individuals in more than 140 cities and over 50 countries.
“Winning the award was a great honour but it felt unusual given the growth of Dental Corporation was really a team effort amongst all our head office and practice staff. That said, it was nice to win the regional award and we’ll see how we go in the national finals coming up in November.”
The success of Dental Corporation is yet another feather in Mark’s cap of achievements. The visionary leader has over 20 years experience in corporate finance, investment banking and company management. He has undertaken numerous Australian Stock Exchange (ASX) floats as well as capital and finance raisings, across many industries. Prior to Dental Corporation, he oversaw the growth of ASX-listed enterprise, Kids Campus, from 6 to 120 childcare centres in 3 states.
Best Investment Decision Ever Made
Not yet resting on laurels, Mark has already drawn up a 5-year plan to build Dental Corporation up to 350 practices in Australia and New Zealand (10 per cent of the market), targeting revenues of $700-$800 million.
“We have remained on track to achieve over 350 practices within the next 5 years and believe that our market presence and reputation will allow us to continue growing at the rate we have over the past 4 years. Our expansion in Canada is above those targets.”
In May 2011, Fortis Global Healthcare Pte Ltd, an India-based healthcare group, took a controlling stake in the company through share acquisitions. Including the Fortis investment, the company has raised over $180 million in equity funding from outside investors and issued more than $50 million in equity to partner dentists.
“The Fortis Group is extremely supportive of our business model but is not involved in the day-to-day management of the business and their investment will not result in any changes to our business or business model.
“In conjunction with Fortis, we are considering opportunities in the Asian region where Fortis has a significant presence. At the moment, our focus remains on Australia and New Zealand and our new investment in Canada, where we now own 10 practices with a further three under Heads of Agreement. “
Having risked personal capital of over $4 million and raised over $20 million in equity to establish Dental Corporation, Mark says of taking the plunge: “In the end, it was the best investment decision I have ever made – even with the subsequent advent of the GFC (Global Financial Crisis).
“Since inception, the value of our shares has increased by over 300 per cent, and which I’m happy to add, translated into financial gains for all our dentists and investors through a shareholding scheme.”