Gentle Dental to Drop Public Stock Sale

Gentle Dental Service Corp. said it has arranged a private placement of $45 million with institutional investors.

When the placement is completed, the Yorba Linda dental-practice management company will drop its plans to sell 3.6 million shares of common stock to the public.

Gentle Dental said the funding includes $15 million of preferred stock and $30 million in convertible debt with a group of institutional investors led by Chase Capital Partners.

Sprout Group, an existing venture investor in Gentle Dental, is also a “significant participant” in the new financing, Gentle said.

The convertible debt has a term of eight years and both the preferred stock and the convertible debt are convertible into Gentle Dental common stock at $9.21.

Gentle Dental said the placement is intended to support future growth. Sprout Group is the venture capital affiliate of Donaldson Lufkin & Jenrette Inc.