A dental support organization (the “Company”) was expanding in new and existing regions. They sought to finance the purchase of equipment and supplies to outfit and upgrade those locations. Since the Company’s inception, its growth strategy has involved acquiring and integrating new dental practices. The Company currently operates dozens of dental clinics across multiple states.
A healthcare-focused private equity firm has backed the business to sponsor the roll-up of clinics. Atalaya was introduced to the Company, which was seeking non-dilutive growth capital, through a banking relationship and our digital marketing efforts. As a growth stage business, the Company’s credit profile was not a fit for the bank’s balance sheet. While the opportunity was on the small end of Atalaya’s typical transaction size, it was strategic in that it opened a new sourcing relationship which could lead to additional business.
The Company was seeking equipment financing to enable it to organically develop and open new locations to enhance its acquisition strategy. The lease capital will be used for specialized dental clinic equipment, such as dental chairs and medical supplies. If a new location struggled, the equipment could also be repurposed for the Company’s other locations.
In Q4 2019, Atalaya closed on a $1.5 million lease line for the Company, with opportunity for additional capital as equipment needs arise. Atalaya was compelled by the Company’s stable sponsor backing, growth trends, and experienced management team. Atalaya’s background in healthcare and specialized equipment enabled us to get up to speed quickly on the transaction. The solution was also a good fit for the Company, as it enabled continued expansion without further equity dilution. Atalaya was able to expeditiously approve the transaction and funding via the bank referral source’s documents. Due to this flexibility, the bank was also able to maintain its customer relationship and provide seamless funding execution.