Photo: Iowa Tourism Office
March 20, 2009Source:
Des Moines Business Record

Tonka's AppleWhite Dental Seeks to Acquire Iowa Dental Practices

March 20, 2009 | DesMoines, IA — A Dubuque-based start-up company wants to make it easier for Iowa dentists to focus on providing dental services rather than on processing payroll and filing insurance claims.

AppleWhite Dental LLC, a dental practice management company, was formed by two industry veterans with the goal of acquiring approximately 25 Midwest dental practices within the next five years. Thomas McCoy, a Dubuque dentist, and Yvonne Mayberry launched the company, with Tonka Bay Equity Partners LLC as a majority owner.

Tonka Bay, a Minnesota-based private-equity investment company, is an investment partner in the Iowa Fund of Funds, an initiative to increase the level of venture capital investments in Iowa. AppleWhite is the third Iowa company in which Tonka Bay has invested, along with Accumold LLC in Ankeny and Cedar Rapids-based Hunter's Specialties Inc.

"We were in the dental management business in the past," said Cary Musech, Tonka Bay's managing principal, referring to an earlier investment in Midwest Dental, a Wisconsin company it sold several years ago that Mayberry had headed. In seeking another dental management company to invest in, "we looked for existing models and there weren't any out there, so we decided to start our own," he said.

AppleWhite, which has so far acquired five Iowa practices, has signed letters of intent to purchase four additional practices, including one in the Des Moines area, Musech said. Its investments in small dental practices range from $250,000 to $500,000 in most cases; Tonka Bay plans to invest up to $10 million in the company.

"Many times, dentists want to be part of a larger group, get more flexibility in their schedule," he said. "They don't have to run the business side of it, handle the regulatory requirements. Because we can consolidate some of the back-office functions, we can produce better efficiencies for the practices."

Tonka Bay's investment objective is to expand the company for five to seven years and then sell it to a larger dental practice management company or to another private-equity firm, Musech said.

About Tonka Bay Equity Partners

Located in Minnetonka, Minnesota, Tonka Bay Equity Partners acquires and invests in small and medium sized companies in the manufacturing and business services sectors. Tonka Bay manages two private equity funds with combined capital of $200 million. Its limited partners include major financial institutions and high net worth individuals. The funds are licensed as Small Business Investment Companies (SBICs).