Ontario Teachers near $1.3 bln Heartland Dental deal-source

NEW YORK Mon Nov 5, 2012 9:46am EST

NEW YORK Nov 5 (Reuters) - Ontario Teachers' Pension Plan is expected to announce a roughly $1.3 billion deal to acquire Heartland Dental Care Inc, one of the largest U.S. dental practice management companies, according to a person familiar with the matter on Monday.

Ontario Teachers, one of Canada's largest pension funds, has prevailed over three private equity firms that had also made final bids for Heartland Dental in an auction, the person said.

Reuters reported previously that buyout firms KKR & Co , Apax Partners and Madison Dearborn Partners submitted final bids on Oct. 22 for Heartland Dental, which has been exploring a sale after hiring investment banks Jefferies and Moelis earlier this year.

Bloomberg reported late on Sunday that Ontario Teachers has won the auction, beating out the three private equity bidders.

Heartland, based in Effingham, Illinois, and Ontario Teachers did not immediately respond to requests for comment. The person familiar with the matter asked not to be identified because the deal had yet to be announced.

Heartland Dental, in which Chicago-based private equity firm CHS Capital Partners has a stake, has about $120 million in annual earnings before interest, tax, depreciation and amortization and could be sold for 10 to 12 times EBITDA, Reuters reported previously.

Heartland Dental manages more than 350 affiliated dental practices in 19 U.S. states, providing dentists with administrative services such as personnel staffing, purchasing, and financial, marketing and technology support, according to its website.

The company is partly owned and operated by founder and Chief Executive Rick Workman, a dentist. CHS Capital made a minority equity investment in 2008 for an undisclosed sum.

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