Ladd Dental Group

For years, Aspen Dental was considered one of the great growth stories in dentistry . Through aggressive expansion, strong marketing, and private equity backing, the organization grew into one of the largest dental platforms in the United States. But today, a different conversation is taking place among lenders, investors, DSO executives, and independent practice owners. The topic isn't growth. It's debt. More specifically, it's the long-term consequences of dividend recapitalizations and what happens when financial engineering collides with a higher-interest-rate environment. What Is a Dividend Recapitalization? A dividend recapitalization occurs when a company borrows money and uses the proceeds to pay a dividend to its owners. Unlike a traditional dividend, which is paid from accumulated profits, a dividend recap is funded by new debt. The private equity owners receive cash immediately. The operating company keeps the debt. For investors, dividend recaps can be attracti...