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Canada’s largest consolidator of dental practices has called off a potential sale, saying its board felt offers on the table did not reflect the fair value of the company.

Dentalcorp Holdings Ltd. also said it is launching a share buyback program and it has sold off about a dozen specialty locations at a loss. The company made the announcements while reporting its first-quarter results Friday.

Founded in 2011, Dentalcorp has assembled a network of 536 clinics as part of a private-equity-fuelled roll-up of the dental industry. The company had an initial public offering in May, 2021, to raise funds to pay down some of its debt. Shares debuted at $14 and climbed as high as $18.36, before crashing to a low of $5.65 in November, 2022. Days after that low was hit, Dentalcorp’s board announced it would start a strategic review in response to offers to buy the company.

The committee overseeing the sale process did not include board members from L Catterton, a New-York-based private-equity firm that owns 39 per cent of Dentalcorp’s stock and 28 per cent of voting rights. That led to speculation from analysts that one of the offers on the table was a take-private bid from L Catterton and Dentalcorp chief executive officer Graham Rosenberg, who owns 5 per cent of stock and 35 per cent of voting rights.

But on Friday, Dentalcorp announced the committee decided the undisclosed offers did not reflect the “fair value” of the company and that the existing business strategy was sound. The board said it accepted that report.

In a call with analysts, Mr. Rosenberg declined to share any details on the offers, but said the board looked at “every option you would expect.” He added that “the financing market has significantly deteriorated in the last six months” and that had an effect on the bids.

RBC Dominion Securities Inc. analyst Douglas Miehm said in a research note that shareholders were like to see the lack of a sale as a “disappointing outcome,” but maintained an outperform rating.

Dentalcorp’s shares, which had rallied in the months since the strategic review launched, fell 6 per cent to $7.25 at Friday’s close.

The company reported revenue of $358-million for the first quarter, 28 per-cent more than the same quarter last year. The increase was attributed to acquiring additional practices, to seeing more patients and to an annual update to provincial fee guides that allowed dentists to charge more.

However, the company’s net loss also grew, to $33-million, up from an $11-million loss in the same quarter last year. Total debt stood at $1.1-billion with an effective interest rate of 6.8 per cent, according to filings.

Some of that loss came from practice sales. Although the company acquired six clinics in the quarter, it also divested 13 locations specializing in orthodontics, at a loss of $19-million. Dentalcorp did not disclose the buyers. Quarter filings say those 13 locations made $5-million for the quarter and had a net income of $200,000.

Dentalcorp also reported the Toronto Stock Exchange had approved its plan to buy back 3.5 million shares, or about 2 per cent of outstanding stock, in increments over the next year.

Converge Technology Solutions, which had hung up a “for sale” sign last fall around the same time as Dentalcorp, also announced this week that its board had concluded a strategic review without approving a sale.

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