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DENTSPLY SIRONA (XRAY) Boosts Clear Aligner Foothold With Buyout

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DENTSPLY SIRONA Inc. XRAY recently acquired substantially all of the assets of Propel Orthodontics in a deal worth $131 million (all in cash). Notably, the assets include the VPro device and the Fastrack Mobile App.

It is worth mentioning that Propel Orthodontics has made a name for itself as a leading innovator, manufacturer and worldwide seller of orthodontic devices. The company offers in-office and at-home orthodontic accessory devices, which include high frequency vibration technology, to orthodontists and their patients. These devices enhance patient comfort and has the ability to reduce the overall treatment time.

Per management, the buyout lends support to DENTSPLY SIRONA’s innovation efforts in the orthodontics space. The deal also allows the company to make further investments when it comes to product development in this space in the near term.

Deal Rationale

The buyout marks a significant step in DENTSPLY SIRONA’s efforts to further solidify its presence in the rapidly growing clear aligner market. The product lines (in this buyout) are complementary to the company’s Byte and SureSmile businesses.

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Moreover, the transaction is a solid strategic fit with DENTSPLY SIRONA and is likely to boost the its Technologies & Equipment business line.

Notable Acquisitions

In January 2021, the company acquired Byte, a fast-growing clear aligner company, in an all-cash deal for $1.04 billion. It is worth mentioning that Byte maintained its leadership position in the rapidly-growing direct-to-consumer, doctor-directed clear aligner market.

In the same month, the company also acquired Datum Dental, which will add the clinically superior proprietary technology GLYMATRIX and its strong OSSIX biomaterial to DENTSPLY SIRONA’s digital dentistry portfolio.

Market Prospects

Per a report by Fortune Business Insights, the global orthodontics market was worth $4.06 billion in 2018 and is anticipated to reach $9.72 billion by 2026, witnessing a CAGR of 11.6% during the forecast period (2019-2026). Hence, the buyout is well-timed for DENTSPLY SIRONA.

Price Performance

Shares of this Zacks Rank #3 (Hold) company have gained 25.2% on a year-to-date basis compared with the industry’s growth of 6.9%.

Stocks to Consider

Some better-ranked stocks from the broader medical space are HCA Healthcare, Inc. HCA, DaVita Inc. DVA and Encompass Health Corporation EHC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

HCA Healthcare’s long-term earnings growth rate is expected at 12.3%.

DaVita’s long-term earnings growth rate is estimated at 14.4%.

Encompass Health’s long-term earnings growth rate is projected at 17.3%.

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DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report

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