Private Equity Firm Arby Partners Invests in Dental Service Orgainization Dr. Dental Management, LLC

Abry Partners has made an investment in Framingham, Massachusetts-based Dr. Dental Management, a dental management service organization. No financial terms were disclosed.

March 13, 2019
PRESS RELEASE
BOSTON–(BUSINESS WIRE)–Abry Partners (Abry), a Boston-based private equity firm, today announced that it has completed a strategic investment in Framingham, Mass.-based Dr. Dental Management, LLC (Dr. Dental), a dental management service organization that provides comprehensive management and administrative services to Dr. Dental-branded offices.

Dr. Dental has a unique playbook for growth, successfully scaling the company exclusively through new site openings to become one of the largest dental management service organizations in New England, with 100 active dentists treating over 250,000 patients a year. With this infusion of capital from Abry, Dr. Dental will continue to expand organically by opening new locations but will now also target strategic acquisitions of dental practices and groups throughout the Northeast.
Dr. Dental was founded in 2004 by the brother and sister team Alex Faigel, CEO, and Dr. Julia Faigel, DMD, clinical director, with the mission of providing quality dental care and great service at a lower cost in convenient neighborhood locations. The organization has grown from a single location to now 44 locations with 250 operatories throughout Massachusetts, Connecticut, New Hampshire and New Jersey.

The Dr. Dental management service organization supports its patient-care locations in all non-clinical aspects of dental practice, including staffing, patient scheduling, billing and collections, financial reporting and analysis, group purchasing, payroll, marketing, education and training. This suite of services enables affiliated dentists to focus exclusively on delivering high-quality patient care, making Dr. Dental one of the leading brands as measured by patient satisfaction in the Northeast.

“Abry’s investment in Dr. Dental is a true testament to our company and the dedication of our doctors and their loyal patients,” said Alex Faigel, Dr. Dental’s co-founder and CEO. “We’re excited to build on our recent growth with Abry Partners and look forward to all that we can achieve together. By combining our first-rate reputation and expertise in organic growth with Abry Partners’ resources and guidance for strategic acquisitions, we see Dr. Dental achieving record growth and rapidly expanding its footprint over the next few years.”

The funds will also be used to hire additional management and administration staff, and expand marketing and brand awareness for Dr. Dental and its affiliates. Dr. Julia Faigel and Alex Faigel will continue in their current management roles and run day-to-day operations.

“We see a very bright future for Dr. Dental,” said T.J. Rose of Abry Partners. “Alex, Julia and their team have built a strong business ripe for further growth. This investment perfectly aligns with Abry’s multi-site healthcare specialty platform – including dermatology, dental, autism and urgent care – and we look forward to leveraging our expertise to help accelerate growth organically by expanding with new locations and through acquisitions.”


About Dr. Dental Management
Headquartered in Framingham, Mass., Dr. Dental is a leading Dental Management Service Organization (“DSO”) in New England. Dr. Dental has 44 branded locations across four states (Connecticut, Massachusetts, New Hampshire and New Jersey). Dr. Dental is focused on providing quality and affordable care for all and has established itself as a leader in patient satisfaction. For more information, visit www.mydrdental.com.

About Abry Partners
Abry Partners is one of the most experienced media, communications, and information services sector-focused private equity firms in North America. Since its founding in 1989, the firm has completed over $80 billion of transactions, including leveraged buyouts, growth financings and recapitalizations. Currently, Abry manages over $12.0 billion of capital in its active funds.

Dr. Dental Locations 
Arby Partners Portfolio

Xerox Pays $236 Million to Settle State of Texas Dental Fraud Case Legal Team: Whistleblowers Dr. Christine Ellis, Madelayne Castillo, Yarubi Morales and others Are Vindicated

Xerox Pays $236 Million to Settle State of Texas Dental Fraud Case
Legal Team: Whistleblowers Dr. Christine Ellis, Madelayne Castillo, Yarubi Morales
and others Are Vindicated

AUSTIN, Feb. 20, 2019 – The $236 million settlement of the State of Texas’ Medicaid fraud
claims against Xerox Corp. business units vindicated whistleblowers Dr. Christine Ellis,
Madelayne Castillo, Yarubi Morales and other whistleblowers, their legal teams said today. The
settlement is the largest recovery ever in a healthcare fraud recovery suit in Texas for Medicaid
related claims.

The State’s lawsuit alleged that Xerox violated the Texas Medicaid Fraud Prevention Act and
“rubber-stamped” prior authorization requests by unqualified clerical employees, allowing “vast
numbers” of orthodontic procedures for children whose condition did not meet Medicaid criteria
for treatment. The company, formerly known as Affiliated Computer Services, Inc., before Xerox
acquired it, also was accused of making false statements or representations in Medicaid filings
with the state.

Dr. Ellis, an orthodontist in Dallas, testified before a congressional committee in Washington in April 2012 about alleged Medicaid fraud in orthodontic billings by Texas dentists.

Ms. Castillo was an employee of the now-defunct All Smiles dental chain and West Texas Dental. Ms. Morales was a former employee of the now defunct All Smiles dental chain and Rodeo Dental.

Dr. Ellis, Ms. Castillo, Ms. Morales and several other whistleblowers all filed suits approximately
two years before the State filed its suit. The State has acknowledged that the facts underlying its
suit are the same as those underlying the whistleblowers’ previous filings.

Xerox became the state’s Medicaid administrator in 2003. Between 2004 and 2012, Texas
expended approximately $1.1 billion on orthodontics under the Texas Medicaid program.
According to the State’s lawsuit, Xerox, and ACS, Inc. before it, repeatedly represented to Texas
Medicaid officials that their prior authorization system ensured proper predeterminations of
qualifications.

Ms. Castillo, Ms. Morales and several other whistleblowers who filed cases against ACS/Xerox
are represented by Rusty Tucker of the Law Offices of James R. Tucker, P.C. of Dallas and MikeTibbals of Dallas. Ketan U. Kharod, of Guerrero & Whittle, PLLC, of Austin, Charles S. Siegel
and Caitlyn Silhan, of Waters and Kraus, of Dallas, Daniel L. Hargrove, of the Hargrove Law Firm
of San Antonio, and James R. Moriarty, of the Law Office of James R. Moriarty of Houston
represent Dr. Ellis.

Charles Siegel of Waters and Kraus said, “Because of Dr. Ellis and other whistleblowers who
brought lawsuits against ACS/ Xerox, the State of Texas ultimately showed how Xerox and ACS,
Inc. deeply compromised the integrity of the Texas Medicaid program. They faced vicious legal
attacks in their courageous efforts to set the record straight.”

Rusty Tucker of the Law Offices of James R. Tucker, P.C. said, “Our legal team hopes this
settlement sends a strong message that companies that prey upon Texas families and defraud the
state will face the judgment of the courts. Companies who commit unlawful acts in violation of
the Texas Medicaid Fraud Prevention Act will be held accountable. Dr. Ellis, Ms. Castillo, Ms.
Morales and other whistleblowers who came forward should be recognized for helping expose this
massive fraud.”

The case is “The State of Texas v. Xerox Corporation, et al.,” Cause No. D-1-GV-14-000581 in
the 53rd Judicial District of Travis County, Texas.

CONTACTS:
Rusty Tucker, Law Offices of James R. Tucker, P.C. (214) 505-0097
Charles Siegel, Waters and Kraus (214) 357-6244
James Moriarty, Law Offices of James R Moriarty (713) 857-1212

After WFAA investigation, company settles with State of Texas for record $235.9 million

Xerox Corporation and its former subsidiary, Conduent, agreed Tuesday to a record $235.9 million settlement with the State of Texas, according to the Texas Attorney General's Office. 
It was the largest single Medicaid fraud-related settlement in a case filed by the Texas Attorney General.

The settlement comes after a three-year WFAA investigation that uncovered millions of dollars in alleged overbilling by Texas dentists targeting low-income children for unnecessary and often harmful dental and orthodontic work.

Read entire story at WFAA website

Related:

 WFAA's Byron Harris reports 

Tailwind Capital's Dental Service Organization Investments: Benevis and Lone Peak

Just an FYI, since I'm sure this information will be needed one day:

Smiles 4 Kids, which had been purchasing many old Small Smiles clinics and Kool Smiles are both now operated by Tailwind Capital.

Benevis is Kool Smiles and Resolution Dental

Lone Peak is Smiles 4 Kids as well as a few other names.

Financing for Benevis's sale to Tailwind seems to be, in part,  by New Mountain Finance and happened during the 1st quarter of 2018. Probably before the ink on the Kool Smiles settlement was dry. 

In a May 2018 conference call transcript New Mountain states:

Our new investments were highlighted by a larger-size directed origination of a unitranched loan for Benevis, several club deals including a loan to ACA Compliance and one addition to both our net leased portfolio and our SBIC investing program. We believe that the consistency of our deal flow in this competitive market shows the strength of the broad sourcing network that we have built.

(unintranched debt: debt is a type of structured debt that obtains funding from multiple participants with varying term structures.)

 

In their 2018 holdings report, Washington State Investment Board is invested is Tailwind and New Mountain.


Although Benevis still shows up on FFL Partners website's portfolio page,  it is listed under the "Former" tab on their website.

Tailwind Captial Portfolio
FFL Partners Portfolio