	There are numerous moving parts-sometimes literally-involved with creating a high quality dental restoration. Working with technologies, tools and materials that are designed to work together can make that process a little less complex.

	Sometimes this means using an entire line of products from one company with a systematic workflow. However, as new technologies and novel materials filter through the industry, more and more it seems that labs must find compatible options to allow their existing systems to work efficiently in new ways. For a lab to succeed it must keep its dentist customers happy, and that means being able to provide the restorations they are looking for at the level of quality and price point they demand.

	Zooming out from the benchtop to the boardroom, it’s easy to see some similarities. While many of the companies creating the products, materials and technologies used in dental labs on a daily basis strive to provide start-to-finish systems, technological and material innovations can come from different sources, and finding ways to stay compatible can be a key.

	In the past 18 months there has been a steady stream of press releases announcing mergers, acquisitions and formal partnerships between major dental companies. Technological developments are a key part of these moves, but they are motivated by profit margins as much as innovation. For the labs served by these companies, keeping track of who is aligned with who and understanding why these partnerships are being formed can be helpful when trying to figure out what the lab-level impact of these corporate actions might be.

	Corporate moves such as these are a normal part of doing business, and the recent wave of mergers, acquisitions and partnerships might be coincidentally timed, but Ernie Knight, a Harvard MBA who has worked as venture capital director for Nationwide Mutual Capital, said it is just as likely that these moves are a sign that companies in the dental industry see good things happening in the economy and they are setting themselves up for post-recession growth.

	“In the last few years with the financial armageddon of the Great Recession, companies have been hoarding cash. You can only hoard cash so long, and then you have to put it to use. The use is either giving dividends to your shareholders or making acquisitions that can drive value,” Knight said.

	This is especially true in the technology sectors of the economy, and in the dental industry many of the recent moves have come from technology-focused companies such as Straumann, Dental Wings, 3Shape and Align Technology. While tech companies were once newer business entities, Knight said they have now established their place in the larger economy and react to the same market forces that drive the overall, global economy.

	As the recession has eased, companies that have found themselves with cash reserves are now looking to branch out and put those resources to work. Growth through merger or acquisition is an established business strategy, and one that can be especially useful to a company looking for further investment via either public or private capital, Knight said.

	“They have to buy to grow. They couldn’t possibly maintain growth rates that would be attractive to investors just through organic internal driven growth and innovation,” he said. “They have to be acquisitive to compete and to create shareholder value.”

	While these corporate moves are a normal part of the ebb and flow of a business cycle, Knight said they can be seen as signs that the companies doing the purchasing see the Great Recession as something in their rear view mirrors. Acquiring another company involves a good deal of risk as well as financial outlay, so the increase in the frequency of these actions can be seen as a positive sign for the overall direction of the economy.

	“Any time you acquire, there’s a level of risk in that. There’s potentially product risk, there’s a risk you can lose focus. You tend to batten down the hatches in the tough parts of the cycle, and be more open and able to take on these growth risks when times are better,” Knight said.

	Another good sign about the moves being undertaken in the dental industry is that they make sense from a product standpoint. While some acquisitions are undertaken as a way to absorb a direct competitor, more often these moves allow a company to accelerate its growth by adding on a profitable enterprise that has synergies with the acquiring company’s core business. This is certainly the case with Argen Corp.’s purchase of Captek, Align’s move to buy Cadent and DENTSPLY International’s acquisition of Astra Tech.

	But not all of the recent moves have been outright purchases, as formal partnerships have also been something of a trend. The wave of partnerships kicked off in early 2010 as Nobel Biocare announced a Preferred Partner Program aligning with Ivoclar Vivadent, VITA and Noritake. More recent technology partnerships have been formed between Straumann, Dental Wings and 3M ESPE, as well as between Biomet 3i, 3Shape, Cadent and 3M ESPE. Earlier this year 3M ESPE also announced a partnership with Jensen Dental.

	These deals allow the companies to collaborate on product development to create materials and technologies that are designed and tested to work well together even when different parts of the system come with different brand names on the packaging.

	Knight said formal partnerships such as these have been more common in recent years. Sometimes they can be a prelude to a merger, as companies want to test the waters before formally combining corporate resources. Other times these partnerships are a way for both corporate entities to retain individual identities and cultures while adding new capabilities without the risk of full-scale investment.

	“Lots of firms are wanting to walk before they run. You’re seeing a little more of that than you would typically because people are still trying to find their way out of the Great Recession,” Knight said. “It’s a way to mitigate your risk by not jumping in full force.”

	Whether the move is an outright acquisition or a partnership deal, Knight said he thinks these moves are often good for the marketplace and can spur innovation.

	Acquisitions often involve a larger company buying a smaller outfit that has an innovative product or technology. The larger firm is in better position to leverage the technology and often can speed up the pace at which that technology can impact the industry as a whole. Partnerships can allow two successful companies to combine their offerings in an even more seamless way. When a hardware and a software company work together each company’s part of the system can be fine-tuned.

	These corporate changes are not often immediately noticeable at the customer level. Even after an acquisition, a new sales person or product manager may take over, but Knight said smart companies make those moves slowly and help ease customers through the transition. In fact a larger company might be ready to offer new resources to the customers of the smaller firm that was purchased.

	Still, Knight said it is important for a business’ customers to pay attention to the moves it is making at the corporate level because an acquisition or partnership deal may eventually lead to a significant change in a product a lab has come to rely on.

	This can be especially true in the technology sector. If your lab has an open-architecture scanner and software from one company, and the material or production provider you work with is partnering up with a different software firm, there’s a chance your system may not be compatible at some point in the future. Knight said these moves rarely happen in a flash, and most companies will work to help their customers transition with the change. However, it is important as a customer to pay attention to avoid a potentially costly surprise.

	“Clearly if they bury their heads in the sand and pay no attention to the trends and to what different partnerships are being developed, and to what type of things are being thought about with different vendors, it could come to pass that they wake up one day and there’s been a change and now they’re in crisis mode,” Knight said. “It’s something they should be able to plan for over time and not be caught off guard.”

Articles

 There are numerous moving parts-sometimes literally-involved with creating a high quality dental restoration. Working with technologies, tools and materials that are designed to work together can make that process a little less complex.

Connecting the dots

	When the ship sailed, Daniel Serrago, president of Garland Dental Services and IBEX Dental Technologies was on it, but he was already planning a new future.

	The year was 1996, and Daniel, who had worked for 15 years as a radio electronics officer on commercial ships, was in search of a different career. His two children were entering adolescence and he wanted to be at home with them and his wife, rather than working at sea for months at a time.

	The idea to start his first company, Garland Dental Services, came from a visit to his dentist.

	“I was literally going on a ship in three or four days, and I mentioned it to my dentist, and he said, ‘Why don’t you repair dental equipment?’” Daniel recalled.

	After the dentist explained that it could cost him $200 to ship a handpiece out-of-state to get fixed, and that he then had to wait several weeks or longer to get it back, Daniel recognized the inkling of a business venture. He spent his next stint at sea researching the idea and, in July 1996, founded Garland Dental Services, a dental equipment repair and parts company.

	With what he calls “a God-given talent for fixing things,” Daniel was sure he would be able to adapt his skills to a different industry.

	“I’d sailed on ships with equipment that I’d never seen before,” he said. “You look at it, you study it and you realize, ‘I can do this.’”

	With many Mom and Pop dental equipment repair businesses in the area, Daniel said he had ample competition. Finding quality parts and marketing his business were two of his greatest challenges and two of the biggest factors in Garland’s growth. In the first four months of starting the company in his house and garage, Daniel visited 860 dentists to talk to them about Garland.

	“I had a good number of dentists hand me something to repair right then,” he said.

	Dental labs, however, would become the majority of the business. He visited one lab where the owner spent time showing Daniel the lab’s equipment, and explaining why they needed a company that could repair their equipment rather than sending it to the manufacturer.

	“There wasn’t a good conduit for repair in the lab industry,” Daniel said. “For manufacturers, a speedy repair is four to six weeks. I saved labs money and I was faster.”

	Today, Garland is one of the largest privately-owned repair companies in the country; about 85 percent of Garland’s work comes from dental labs and 15 percent comes from dentists. The company also does repairs for manufacturers.

	“We’re the behind-the-scenes service entity for a lot of well-known manufacturers,” said Julie Hyland, the company’s business manager. She said the company aims for quality in all it does.

	“We use the highest grade of parts,” she said. “We always want our repairs to go past warranty. The dental tech and the dentist need to be able to make a living and to be able to count on parts.”

	A few years ago, Daniel decided to start IBEX Dental Technologies, which manufactures porcelain and pressing furnaces. After repairing these machines for many years, “I had a very keen sense of what they do well and what they don’t do well,” he said.

	The goal of IBEX is to provide state-of-the art furnaces that any lab would be able to afford. It took a year and a half of design work and a partnership with Jim Emmons, president of Spectrafire Technologies to come up with the product. Emmons is a three-time winner of the Advanced Ceramics Competition of the Texas Dental Association and recipient of the Harry Hageman Inventors award.

	“He helped me along in the process to make sure our ovens are doing what they are supposed to do,” said Daniel, adding that IBEX ovens sell for $3,995-$4,995.

	Today, Garland and IBEX employ a staff of 10, including numerous family members. Daniel’s daughter, Rebekah, is director of marketing for IBEX. His wife, Sharon, does accounting and runs an art studio inside the facility; his brother, Tommy, does handpiece repairs for Garland and helps with IBEX. Tommy’s wife, Kathy, runs the parts department.

	A second family is also involved in the business. Julie’s father, Charles Fletcher, is a retired mechanical engineer who started doing oven repairs when he decided retirement wasn’t for him. Charles is in charge of furnace and large equipment repairs for Garland, and many in the lab industry know him as ‘The Oven Guy’. Julie’s daughter, Mandi, handles Garland’s repair accounts.

	Julie said the company’s team is always willing to provide technical advice free of charge, and does so in a friendly manner.

	“We always go above and beyond what’s expected of us,” she said. “We have that southern charm going for us. What more can you want?”

 When the ship sailed, Daniel Serrago, president of Garland Dental Services and IBEX Dental Technologies was on it, but he was already planning a new future.  The year was 1996, and Daniel, who had worked for 15 years as a radio electronics officer on commercial ships, was in search of a different career. His two children were entering adolescence and he wanted to be at home with them and his wife, rather than working at sea for months at a time.

Legacy Laboratories: Garland Dental Services/IBEX Dental Technologies

	Speed and capacity are not common considerations when people think about utility services such as gas, water, electricity and even phone lines.

	All of these services are critical to both homes and businesses, and of course people look for ways to reduce their monthly bills through efficient and judicious use of these resources. However, it’s doubtful that you or anyone you know has turned on an electric or gas appliance, or picked up the phone and cursed at the slow speed of the gas, electricity or phone connection.

	OK, some places have insufficient water pressure, making it slow to arrive, but for the most part all of these services are reliable in terms of providing the amount of the resource you require when you require it. Furthermore, because they are almost universally metered services for which your bill is based on the amount of gas, electricity, water or phone use carried through the wires or pipes, getting cut off for overuse is not a concern.

	The Internet and web connections are different. While not officially considered a utility, online access is now critical for most businesses. Whether used as a communication portal, a research tool, an educational resource or for any of its other numerous uses, going online for something is an everyday occurrence.

	For many being cut off from e-mail and the wider web makes a workday a disaster. The web can bring a lot to a dental lab in terms of better documented communication with your doctors, the ability to share digital images of cases, access to training, continuing education and technique demonstrations, and for labs working digitally, the ability to send and receive digital impressions and case designs. Once the online world has become a part of your workflow, access to that world becomes as vital as access to electricity, gas and water.

	Unfortunately, this access is not treated in the same way as access to your local utilities. Internet connectivity is offered at different speeds depending on connection type and different areas have different options for connecting. Sadly many areas of the country (including major metropolitan areas) have just one option for accessing the web at the speeds required to effectively make use of all it offers.

	The companies providing access are not regulated like utilities, even when they have a monopoly on local access. This means they can charge what they want, cut off customers when they want, limit how customers use the web, slow traffic coming and going from customers of their choosing, and basically set whatever rules they want.

	In such an environment, it’s important to know what you’re getting for the money you spend on your Internet connection. This way you can find the best option in your area depending on how you plan to use the web. You don’t need to know everything about how the Internet works, but knowing a bit about your options and how Internet Service Providers (ISPs) create and regulate the plans available to your lab can help you find the best choice for the way you use the web.

	The late Alaskan Senator Ted Stevens famously referred to the Internet as a “series of tubes.…those tubes can be filled…” While there were plenty of jokes at his expense in the wake of this comment, in a way he was correct.

	The Internet exists as a series of interconnected networks and access to those networks can be gained through various wired and wireless technologies. The different types of connections have different limitation in terms of speeds with which data can be uploaded and downloaded. Additionally, the ISP’s own systems have limited capacities, and thus when traffic is heaviest users can experience slowed speeds online.

	When dealing with things online, connection speed is really what matters. If you are working with the transfer of large digital images, 3D designs or other large files, being able to download and upload these files quickly can be important. Connection speeds also come into play when using the web for video chats, watching CE or technique videos or anything else that involves streaming video. Those videos can require a great deal of space in the “tube” to reach your computer screen and thus, faster connections mean smoother play of these videos.

	In the early days of the Internet there was just one way to connect, via a standard phone line. In those days the speed of the modem that translated the web from the phone to the computer was paired with the speed the phone company allowed for connections to determine how fast you could access the web. Those dial up speeds of up to 56 kilobits per second (Kbps) were state of the art in the late 90s, but seem almost quaint now in the era of cell phones that connect wirelessly at faster speeds.

	Still for modern business use, and even for home entertainment use, cable or DSL Internet connections provide more than enough bandwidth. DSL can offer download speeds of up to 15 Megabits per second (Mbps) while cable is able to hit up to 100 Mbps on the download side. Both are options in most urban areas, but many places just have a choice of one or the other.

	In some cases neither is available, and there satellite Internet connections might be the best option, but these connections are slow by comparison and like satellite TV, subject to weather-related outages, that can make relying on this technology a bad choice.

	The other connection option cuts the cord completely. While the 3G data connections most commonly used for cell phones is not going to provide the speeds needed for business use, the growing 4G networks actually can compete with DSL in terms of speed. Unfortunately they cannot currently compete in terms of coverage or reliability. But expansion of 4G coverage areas might eventually mean easier high-speed Internet access for many people.

	There are additional options for business use such as T1 lines that bring a direct pipeline to your computer. However, these can require expensive set up and are really only a great option for larger businesses with a major investment in online business operations.

	Whatever type of connection is the best fit for where you are located, it is just as important to look into the terms of your deal with your ISP to ensure the service you will get will meet the needs of your lab today, as well as into the future. While utilities operate on a pay-per-use model, ISPs have yet to go that route and instead, have largely abandoned their unlimited data offerings for capped data with penalties for heavy data users.

	While some business class accounts do still retain unlimited data, the speeds at which that data is moved can be slower than consumer accounts that do feature limits on how much data can be used in a month. The data caps do not impact most users now as they do not send and receive enough data to hit the caps, (thus the ISPs stand to make more money by charging for data that is not used than by moving to a pay-per-use model), but file sizes and streaming options continue to grow and thus the caps could become an issue for more users down the road.

	For users who exceed the data cap, there can be a fairly steep charge for the overage, a complete cut off from service, or in some cases a slowdown of connection speeds. Another hidden side to the data caps is that they count for traffic both ways, which means uploads and downloads count toward your bandwidth limit. If you’re both sending and receiving large files on a regular basis, you will use twice the data because you pay for it as it comes in and as it goes out.

	Regardless of how you or your lab use online services now, file sizes and bandwidth use are likely to continue to grow, thus it’s important to plan for both how you use the Internet today, and how you plan to use it in the future.

	The Internet is an important tool that more and more individuals and businesses have come to rely upon. How and how fast you can access that tool remains a tricky issue and will likely remain that way until ISPs are either treated like the utilities they have become, or legitimate competition comes to more markets. Until then, it’s best to know a bit about what you’re paying for when you sign up for Internet service.

 Speed and capacity are not common considerations when people think about utility services such as gas, water, electricity and even phone lines.  All of these services are critical to both homes and businesses, and of course people look for ways to reduce their monthly bills through efficient and judicious use of these resources. However, it’s doubtful that you or anyone you know has turned on an electric or gas appliance, or picked up the phone and cursed at the slow speed of the gas, electricity or phone connection.

dlpmagazine.com-2011-08-01

Connecting the dots

Legacy Laboratories: Garland Dental Services/IBEX Dental Technologies

Tech Smart: Digital Pipeline