Planet DDS, a software maker for the corporate dentistry sector, already billed its Denticon platform as the first and largest cloud-based dental practice management software in the U.S. with some 600 clients.
Then the Newport Beach-based company paid about $30 million to buy Apteryx Imaging Inc., a Vancouver-based dental imaging technology provider whose offerings will be incorporated into Planet DDS’ platform.
It’s a big step up in size for the 17-year-old firm.
Apteryx, which traded on the Frankfurt Stock Exchange Open Market, recorded $15.5 million in 2019 revenue.
By comparison, Planet DDS had about $13.4 million in sales for the 12 months ending June 30; it ranks No. 38 among Orange County’s fastest-growing midsize private companies with two-year growth of 27%, according to this week’s Business Journal list (see page 30).
Planet DDS Chief Executive Eric Giesecke said the company, combined with Apteryx, expects to see about $28 million in revenue this year, even amid a pandemic which has largely decimated the dental industry as practices across the country have been shuttered.
Size helps in this case, he said.
“We are the industry’s most prominent cloud solution for DSO (Dental Support Organizations) groups. We believe we have the largest market share and highest penetration in corporate dentistry,” Giesecke said.
“And Apteryx has the only ‘sensor-agnostic’ software, which allows dentists to use whatever imaging sensor they want and it will work with the software. We like that aspect. We like our position.”
Planet DDS plans to bring on about 10 people to its headquarters just off MacArthur Boulevard—not far from one of the main offices of Glidewell Laboratories, OC’s largest dental products maker.
Plans in Motion
Planet DDS last July was bought by New York-based private equity firm Level Equity Management. The size of the deal was undisclosed.
“We recapitalized the company with equity,” said Giesecke, who had run the company with partner Blake Rice. “We felt pretty comfortable with our long-term value, but in the near term, there was a cash concern.”
Giesecke and Rice purchased Planet DDS in 2015 with other investors.
Rice left his position as president last August, and remains a board director and adviser.
Planet DDS founder Richard Lee, who now leads Irvine-based teledentistry firm Virtual Dental Care, started the company in 2003.
$30M Deal
Planet DDS had been working with Apteryx for about 10 years.
Apteryx, which counts 25 years in business and makes imaging software, devices and screening sensors, has the “same type of DSO clients” and was a “good cultural fit,” Giesecke said.
The deal with Apteryx closed last month.
Planet DDS will retain Apteryx’s 55 employees based in Atlanta, Ohio and Canada.
The company currently employs 45 workers at its Newport Beach headquarters and nine employees at its Arizona sales office.
Planet DDS expects to hire for sales and marketing, engineering and product development, and support functions in Newport Beach this year.
Mission Critical
Corporate dentistry firms consolidate and operate multi-location, multi-doctor dental practices under the same corporate umbrella.
DSOs in particular can’t operate with outdated software to run their practices, Giesecke said.
“We’re mission critical. We’re the last thing to go before the lights get turned off. Our software is used to maintain dental practices and help [dentists] access their patient records remotely.”
Orange County’s largest DSO is Irvine-based Pacific Dental Services, which provides software and services to dental practice groups in return for an ownership stake in those groups.
Planet DDS hasn’t been reported to work with Pacific Dental Services. Planet DDS clients include Hawaii Family Dental, Hawaii’s largest DSO, and Mid-Atlantic Dental Partners.
Planet DDS’ platform serves single practices and corporate dentistry firms. It handles day-to-day operations such as clinical applications, reporting, patient communications, insurance, X-rays, billing, as well as patient features like online appointment scheduling and payment assistance.
The subscription-based software starts around $300 to $500 per month, according to Planet DDS officials.
Pandemic Adaptations
The effects of the pandemic were initially dramatic.
“Things happened quickly. Because of the shutdown, most practices had to close. Dental offices only saw emergency patients initially,” Giesecke said.
Planet DDS responded with flexible and deferred payment plans to help its customers.
It built new software functionality, such as features that enabled patients to fill out forms from their car and pay via text message or phone.
Some telemedicine capabilities were added to the platform, though Giesecke noted most dental offices reverted to in-person operations quickly because about 80% of dentistry needs to be “in the mouth.”
Planet DDS hosted 14 webinars covering safety and staffing concerns, patient communications, teledentistry and business recovery. The first webinar had more than 2,000 participants.
$1M Loss
“We buckled down as an organization. We didn’t furlough anyone. Our revenue dropped precipitously as well as collections. We huddled internally and focused on other tasks,” Giesecke said, such as updating its support system.
Giesecke estimated the company could see a $1 million loss or less following collection to its top line.
Planet DDS saw sales tick up in April as dentists realized they needed remote capabilities. Dental offices reopened throughout June, July and August.
Patients appeared to return, Giesecke said, in part due to latent demand. Patient volumes now reflect about 70% to 90% of pre-pandemic levels.
Growth Prospects
There’s still room for growth, Giesecke said.
“The industry is still very early in its adoption of cloud-based software. It’s 10% to 15% penetrated. Most DSOs still use on-premise, legacy systems.”
Planet DDS plans to add more functionality for specialists and patient communications features to its Denticon platform, while further developing Apteryx’s imaging capabilities.
There is an exciting opportunity on the imaging side, Giesecke said.
“Apteryx is using artificial intelligence to do what is called ‘carries detection.’ They overlay AI on a bunch of images to identify areas of potential cavities. It’s a diagnostic-assistance tool,” he said.
Planet DDS will ultimately continue to grow at scale and focus on both the DSO enterprise and solo markets with a product that creates “access from anywhere” and provides “the benefits of scalability,” Giesecke said.
