Brident Dental & Orthodontics appears to be reducing its presence in Texas.
TDMR has received several independent reports indicating that Brident locations in Texas are being offered to prospective buyers. One source familiar with the process described seeing a substantial list of offices being marketed. Another source reported that some locations have already been sold or closed. Speculation is that Brident might severely curtail its presence in Texas or, as one source has even suggested, leave the state.
It was only a few years ago, in late 2022, that Brident was celebrating the acquisition of its 130th Texas practice.
Today, the company’s website lists 103 Texas locations, with apparently many more locations on the chopping block.
This is a radical change.
Financial pressure on parent company
There is financial pressure on its parent company, Sonrava Health, one of the nation’s largest dental support organizations. The company is owned by the private equity firm New Mountain Capital.
Bloomberg recently reported that Sonrava hired investment bank Lincoln International LLC “to explore options including asset sales, according to people familiar with the matter. The company, which operates under brands including Western Dental & Orthodontics and Brident Dental & Orthodontics, has been working with advisers Greenhill and Ropes & Gray LLP since last year as it negotiates an out-of-court restructuring with its lenders, said the people, who asked not to be identified because the discussions are private.”
Sonrava also faces challenges in California, its largest market. The company recently joined dozens of healthcare and community organizations opposing proposed cuts to California’s Medi-Cal Dental program, warning that approximately $1 billion in funding reductions could seriously affect dental access and providers.
Why Texas locations?
But why cut back in Texas? We haven’t heard any rumblings from other states. Brident is a major dental Medicaid provider here.
Is Brident selling selected offices to dispose of underperforming locations, or pursuing a broader restructuring of its Texas operations? Are the reported sales intended to strengthen the organization financially, or do they represent a more significant strategic shift, like skedaddling from the Texas market?
Brident’s corporate office has not responded to TDMR’s email request for comment, so the company’s plans remain unclear.
Margins are tight for Medicaid practices
For years, Texas dentists have argued that Medicaid reimbursement rates have failed to keep pace with rising staffing, compliance, and operating costs.
If reports of Brident office sales are accurate, the question has to be asked: Is Texas now a less attractive market, even for one of the state’s largest Medicaid dental providers?
And if they can’t make it in Texas, what does that say about the future of other large Medicaid providers?
It’s speculation
It is all speculation. We don’t know the answer.
Still, it is difficult to ignore the contrast. Just a few years ago, Brident was celebrating the acquisition of its 130th Texas practice. Today, the company’s Texas footprint is considerably smaller.