Sentinel and management acquire Metro Dentalcare in buyout transaction



NEW YORK, May 25, 2005 - Sentinel Capital Partners, a private equity firm that invests in promising, smaller middle-market companies, announced today the acquisition of MetroDentalcare, a leading regional dental clinic operator and provider of group dental care to more than 125,000 patients in the greater Minneapolis/St. Paul metropolitan area. The acquisition of MetroDentalcare is Sentinel's second investment in the $78 billion dental services industry.

Founded in 1968 by Dr. David Milbrath, MetroDentalcare expanded under the stewardship of Dr. Milbrath, Dr. Marcus Gustafson, and Robert Sponsel, MetroDentalcare's current senior management team. Today, MetroDentalcare's group practice includes more than 500 doctors, hygienists and dental assistants serving patients in the Twin Cities from 23 locations. MetroDentalcare is Minnesota's fastest-growing practice and provides a range of state-of-the-art preventive, restorative, pediatric and cosmetic dental services to its patients. Annual revenues are approximately $60 million.

"MetroDentalcare is a leader in an industry we understand well and where we have had previous success," said Paul Murphy, a principal at Sentinel. "We believe this business is well positioned for continued growth and we are extremely pleased to have this opportunity to partner with a great management team to grow and expand their services throughout Minnesota."

In 2003, Sentinel acquired Castle Dental Centers, Inc., a leading provider of dental services in Texas, Florida, Tennessee and California. After the acquisition, Sentinel worked closely with the management team to implement a series of operational initiatives to improve performance and strengthen the business. Last year, Sentinel completed a merger of Castle Dental with Bright Now!® Dental, Inc.

According to Drs. Milbrath and Gustafson, "We chose Sentinel because they understand our industry and have a successful track record in building entrepreneurial businesses. The Sentinel team fits well with our philosophy of doing business and we are very confident in our ability to grow MetroDentalcare while at the same time continuing to provide the quality care our patients have come to expect."

Jim Coady, a principal at Sentinel, said, "We have come to know and respect the people at MetroDentalcare as we have reviewed the business. We are pleased that the entire senior management team is investing alongside us in this transaction and we are eager to work with them to take the company to the next level of growth. Also, MetroDentalcare is the third investment we have made in Minnesota and we like this region very much."

Sentinel recently completed raising $319 million of capital for Sentinel Capital Partners III, L.P. The Fund was more than two times oversubscribed and surpassed its original target of $225 million. Over the past 16 months, Sentinel has acquired Spinrite, a leading manufacturer of craft yarn, and Nivel, a leading independent manufacturer and distributor of aftermarket golf car replacement parts and accessories. Realizations over the same period have included Cottman Transmission Systems (to American Capital Strategies for $77.3 million, a return of 3x cost); the sale of Castle Dental Centers (to Bright Now! Dental, a portfolio company of Gryphon Investors, for $56 million, a return of 2.2x cost); a sale of Falcon Holdings (to management, a return of 3.1x cost); and the sale of Floral Plant Growers (to Blue Point Capital, a return of 2x cost). In February 2005, after 12 months of ownership, Sentinel realized a 7.5x gain on its investment in Spinrite when that company successfully completed a Cdn$202.9 million IPO.