Charlotte-based Dentsply Sirona, the world’s largest manufacturer of professional dental products and technologies, reports it may be interested in selling or merging its Wellspect Healthcare business, according to an SEC filing on Tuesday.
Molndal, Sweden-based Wellspect provides treatments for people suffering with bladder and bowel dysfunction and was formerly part of Swedish Astra Tech, which Dentsply Sirona acquired in 2011.
Dentsply Sirona says its initiating a “process to evaluate strategic alternatives” for the business with more than a 40-year history to “focus our resources and attention on our dental business,” according to a release.
Public companies are not required to disclose such information, however it can be used to their advantage, according to The FinReg Blog sponsored by Duke University’s Financial Economics Center.
“These announcements generate 5.4% stock returns on average (measured over a three-day window) and lead to subsequent offers and completed sales 41% and 32% of the time,” according to a 2021 FinReg Blog. They can also heighten market attention from investors and lead to a more robust M&A sales process, according to the blog.
Wellspect has more than 1,000 employees and operates in 18 counties. Its products include LoFric, a type of catheter, and Navina, which helps people with long-term bowel care. Wellspect has show improved organic sales growth in recent years, including mid-to-high single-digit growth for 2023 and through the first three quarters of 2024, according to Dentsply Sirona.
The continence care space has an estimated $2 billion total market, according to Dentsply.
“We have initiated a review of strategic alternatives for Wellspect as we believe that taking this step now enables us to unlock significant potential value for all our stakeholders,” says Dentsply Sirona CEO Simon Campion in a release.
Dentsply Sirona says it has no deadline for a completion of the review or “assurance that the process will result in a transaction.” The company plans no further announcements until action is taken or disclosure is appropriate or necessary.
Goldman Sachs is serving as financial adviser to Dentsply Sirona and Wachtell, Lipton, Rosen & Katz is serving as legal adviser.
In October last year, Dentsply Sirona voluntarily suspended the sales and marketing of its Byte Aligners and Impression Kits after consulting with the U.S. Food and Drug Administration. In January, the company reported it would “refocus the Byte business model around treatments that include expanded in-person dentist oversight.” Dentsply acquired Byte in 2021 for $1 billion.
In July 2024, Dentsply Sirona announced it would lay off as many as 640 of its approximately 16,000 employees across the globe as part of a restructuring. The company reported that move was expected to save up to $100 million annually in costs.
Dentsply Sirona shares closed Tuesday at $18.28, down 1%, after trading between $17.21 and $34.91 in the past year. Shares are down more than 44% in the last year. It has a market capitalization of $3.6 billion.