Dental Management Group Expands

A tiny consulting firm that creates, buys and manages group dental practices said Wednesday that it received $21 million in venture capital to spur its growth.

GMS Dental Group Inc. is one of a handful of similar firms nationwide that have formed to relieve dentists of having to manage their practices, said Grant Sadler, its chief executive. The firms are similar to companies formed to manage medical practices.

“Wall Street seems to be quite interested in this area,” said Sadler, who acknowledged that GMS eventually would like to offer stock to the public.

GMS, formed in March, raised the money from a group of firms led by Menlo Park-based Sprout Group, a unit of the New York securities firm Donaldson, Lufkin & Jenrette Inc. Sprout invested $12 million of the total.

“There’s a really interesting opportunity for consolidation and bringing some real efficiencies and professional management help to the dental industry,” said Kathleen D. La Porte, Sprout’s general partner. It’s a very fragmented, mom-and-pop kind of business.”

GMS used some of the infusion to acquire five dental practices in San Diego, Stockton, Idaho and Hawaii. The acquisitions boosted the staff from half a dozen executives and management personnel to 250 employees. The rest of the investment will be used to buy other practices, Sadler said.