Dealing with Unexpected Bad News

After several successful years of organic and acquisition-based growth, in March 2020, MB2 was forced to temporarily close its clinics, except for emergency procedures, because of the Covid-19 pandemic. The closures halted MB2’s acquisition growth engine.

During the lockdown, MB2’s cash flow was negative. When its clinics were allowed to reopen, MB2 was required to follow continually changing state and local regulations. It also had to deal with shortages of personal protective equipment (PPE) and reassure its patients, dentists, and employees that their safety was a priority.

Maintained Operations in Lockdown: Sentinel worked with MB2’s management team and partner dentists to weather the shutdown. MB2 created a crisis management center to share best practices among its clinics, secure sufficient PPE, and develop protocols to keep patients and staff safe. Sentinel and MB2 management also developed a plan to conserve cash while preparing MB2 for a strong reopening.

Reopened Clinics Quickly and Safely: When state governments allowed dental clinics to reopen, MB2 was ready and prepared. MB2 had secured a PPE surplus, educated its dentist partners and office staff, proactively communicated with existing patients, and grown its new patient pipeline during the lockdown. Within weeks, MB2’s revenue had returned to pre-pandemic levels.

Revived Acquisition Growth: Sentinel worked with MB2’s lenders to secure favorable amendments to address the lockdown’s financial impact. Sentinel led a financing round that included injecting capital from existing and new lenders and MB2’s shareholders. This capital raise allowed MB2 to play offense at a time when many competitors were on the sidelines and interest from many solo practitioners, who realized they would be better equipped to survive another shutdown as part of a bigger organization like MB2, was spiking.

Having successfully managed through the lockdown while preparing to play offense, MB2 accelerated its acquisition pace and closed 50 new affiliations in the second half of 2020. Having achieved significant growth over a 3½-year investment period and demonstrating extraordinary resilience during the pandemic, MB2 was sold in 2021 to another private equity firm in a highly successful management buyout transaction. Three years later, with MB2 still outperforming its peers, Sentinel participated in a recapitalization of MB2.