Last week, Envista Holdings Corporation announced it has entered into a definitive agreement to acquire Carestream Dental's intraoral scanner (IOS) business for $600 million. Talk about a Christmas gift.
For those who don't know, Envista owns a family of more than 30 dental brands, including KaVo, Kerr, Nobel Biocare, and Ormco. Carestream Dental IOS will be another acquisition.
This acquisition is in line with Envista's long-term strategy to "focus on the fastest growing segments of the dental market and to create differentiated solutions via the digitalization of dental workflows". Without a doubt, digital dentistry is one of the fastest growing segments of the industry.
Envista Holdings Corporation CEO Amir Aghdaei said, "Intraoral scans are often the first step in the digital workflow and critical to many high value dental procedures including implants, prosthetics, and aligners. We are excited to add a suite of world-class intra-oral scanners and software to our portfolio. This acquisition further enables our purpose of partnering with dental professionals to improve patients' lives by digitizing, personalizing, and democratizing dental care."
According to the press release, Carestream Dental IOS has expected annual sales of around $60 million in 2021. This means that Envista paid $600 million for a $60 million a year business, meaning a 10x multiple on revenue not EBITA. We are talking huge numbers.
It will be interesting to see what this means for the future of Carestream Dental intraoral scanners. They are decent scanners but have fallen behind in terms of software as of late. Could this be the boost the company needs to become a market heavy hitter again? Will we see Carestream Dental scanners built into KaVo chairs? Time will tell.