Buyout Financing Stuck on Banks' Books
Patterson Companies, the second-largest US distributor of dental equipment and companion-animal medicines, saw $2.35 billion (about 3.3 trillion won) in buyout financing get stuck on banks' books last April. The debt didn't end up with the private equity firm leading the buyout. It ended up with the banks that had agreed to provide the financing.
According to Bloomberg, Patterson agreed in December of last year to be sold to private equity firm Patient Square Capital for $4.1 billion (about 5.7 trillion won) including debt, and the deal closed on April 17. As it happened, that was just two weeks after President Trump announced reciprocal tariffs on April 2, which froze credit markets. Bloomberg reported that UBS and Citigroup, which had arranged the buyout financing, couldn't sell it to investors and were forced to carry it on their own books.
Credit Market Recovery and Debt Resale After Three Months
Credit markets recovered three months later, in July of last year, and the banks resold most of the debt. Bloomberg added that the $50 million (about 70 billion won) in interest they collected in the meantime covered much of their losses.
Private Equity Moving Into Dental Distribution
Private equity's push into dental distribution isn't unique to Patterson. KKR Buys a Stake in Henry Schein, the Top Dental Supply Distributor covered how the top distributor sold a minority stake. This case is different: the entire No. 2 distributor changed hands, and the financing for it nearly got tripped up by tariff policy.
No Direct Supply to Korean Clinics
Patterson operates only in the US, Canada, and the UK, so it doesn't supply Korean dental clinics directly. In Korea, Shinhung, founded in 1955, has long led the manufacturing and distribution of dental equipment including unit chairs. Still, as private equity keeps taking over distribution networks, whether this trend spreads to Korea is worth watching.