Dental supply firm Dentsply to acquire Sirona in $5.5-bn deal

Two of the biggest makers of dental products said yesterday they had agreed to merge scaling up to take advantage of growing demand for dentistry work.

Dentsply said it would take over Sirona Dental Systems for $5.5 billion in what the two companies termed '' a merger of equals'' that would create a dental health giant having a combined market value of about $13.3 billion.

Between them they had around $3.8 billion in sales and $900 million in adjusted earnings before interest, taxes, depreciation and amortization.

With the move, the companies, said, they would become a one-stop shop for a host of dental products, including new automated dental equipment and other services.

''We are excited about bringing together two industry leaders,'' Bret W Wise, Dentsply's chairman and chief executive, said in a statement. ''Dentsply Sirona will offer a comprehensive line of solutions to more effectively meet the needs of dental customers all over the world and advance patient care.''

The deal would see, Dentsply issue 1.8142 new shares for each existing Sirona share. On the basis of Dentsply's closing price yesterday of, $54.35, that amounted to $98.60, just less than Sirona's closing price, $99.31.

The transaction will result in the world's largest manufacturer of professional dental products and technologies with an implied pro forma equity value of approximately $13.3 billion, based on the closing prices of Dentsply and Sirona on  September, 2015.

The new company will have net revenue of approximately $3.8 billion and adjusted EBITDA of more than $900 million on a pro forma basis for the last 12 months.

The combined company, supported by its leading platforms in consumables, equipment and technology, will offer a powerful set of complementary offerings and end-to-end solutions to enhance patient care.

Customers across the globe will be supported by the largest sales and service infrastructure in the industry to deliver an optimized product range that will meet the increasing global demand for digital dentistry and integrated solutions.

The combined company will have a strong, flexible balance sheet and significant cash flow, giving it the ability to accelerate growth and deliver attractive returns for shareholders.

Upon closing of the transaction, Jeffrey T Slovin, president and chief executive officer of Sirona, will serve as chief executive officer of the combined company and will be a member of the Board of Directors.

Bret W Wise, chairman and chief executive officer of Dentsply, will serve as executive chairman of the combined company.