Investment Group to Buy Control of Dental Insurer Safeguard Health

Safeguard Health Enterprises Inc., the Aliso Viejo provider of dental-care insurance, said Wednesday that an investment group led by CAI Partners and Co. and Jack R. Anderson agreed to invest $40 million to gain control of the company.

Safeguard Health shares soared 50%, or $1.50, to $4.50 in Nasdaq trading. The shares had fallen about 55% from the 52-week high of $7.19 last July 15.

CAI Partners and Anderson, president of closely held Calver Corp., would hold a majority voting power of Safeguard Health and be able to choose half of the company’s directors. The transaction is subject to stockholders’ and regulators’ approval.

The company said it will issue the investors $20 million worth of convertible preferred stock and convertible subordinated debentures and $20 million in senior notes.

Safeguard said it will use the cash to repay debt. The company, which had 1998 sales of $97.5 million, provides dental benefits through various providers to about 1 million members.