Dentsply International (XRAY), Sirona Dental (SIRO) Enter $13.3B Merger Agreement

September 15, 2015 4:23 PM EDT

Dentsply International (Nasdaq: XRAY) and Sirona Dental Systems Inc. (Nasdaq: SIRO) announced that the Boards of Directors of both companies have unanimously approved a definitive merger agreement under which the companies will combine in an all-stock merger of equals. The transaction will result in the world's largest manufacturer of professional dental products and technologies with an implied pro forma equity value of approximately $13.3 billion, based on the closing prices of DENTSPLY and Sirona on September 14, 2015. The new company will have net revenue of approximately $3.8 billion and adjusted EBITDA of more than $900 million on a pro forma basis for the last twelve months.

The combined company, supported by its leading platforms in consumables, equipment and technology, will offer a powerful set of complementary offerings and end-to-end solutions to enhance patient care. Customers across the globe will be supported by the largest sales and service infrastructure in the industry to deliver an optimized product range that will meet the increasing global demand for digital dentistry and integrated solutions. The combined company will have a strong, flexible balance sheet and significant cash flow, giving it the ability to accelerate growth and deliver attractive returns for shareholders.

Under the terms of the agreement, Sirona shareholders will receive 1.8142 shares of DENTSPLY for each existing Sirona share. The exchange ratio reflects an "at market" combination based upon the 20 and 30 day average volume weighted trading prices for each company. Upon closing of the transaction, DENTSPLY shareholders will own 58% and Sirona shareholders will own 42% of the combined company. The stock issuance in the merger is expected to be tax-free to shareholders of both companies.

Proven Leadership Team

Upon closing of the transaction, Jeffrey T. Slovin, President and Chief Executive Officer of Sirona, will serve as Chief Executive Officer of the combined company and will be a member of the Board of Directors. Bret. W. Wise, Chairman and Chief Executive Officer of DENTSPLY, will serve as Executive Chairman of the combined company. The Executive Chairman will work in collaboration with the CEO to execute the corporate strategy and to integrate the companies and cultures. From DENTSPLY, Christopher T. Clark and James G. Mosch will serve as President and Chief Operating Officer, Technologies and President and Chief Operating Officer, Dental and Healthcare Consumables, respectively. From Sirona, Ulrich Michel will serve as Executive Vice President and Chief Financial Officer. The Board of Directors will consist of 11 members, six of which (including Mr. Wise) are current DENTSPLY directors and five of which (including Mr. Slovin) are current Sirona directors. Additional senior leadership positions at the combined company will be named at a later date, consisting of representatives from both companies.

The combined company will be called DENTSPLY SIRONA and trade on the NASDAQ under the symbol XRAY. DENTSPLY SIRONA's Global headquarters will be located in York, PA, the location of DENTSPLY's current headquarters, while the International headquarters will be located in Salzburg, Austria.

Jeffrey T. Slovin, President and Chief Executive Officer of Sirona said, "This is an exciting day for both companies, for the dental community and for patients around the globe. We are bringing together two world class companies that share a culture of innovation and will foster the development of differentiated, integrated solutions for general practitioners and specialists, particularly in the highest growth segments of the dental industry. Combining Sirona's proven digital solutions and equipment with DENTSPLY's leading consumables platform creates the most comprehensive dental solutions offering available to meet customer demand in every key segment. I look forward to leading the talented teams of both Sirona and DENTSPLY as we drive the global digitization of dentistry, offer superior solutions to customers and patients and create The Dental Solutions Company."

"We are excited about bringing together two industry leaders," said Bret W. Wise, Chairman and Chief Executive Officer of DENTSPLY. "DENTSPLY SIRONA will offer a comprehensive line of solutions to more effectively meet the needs of dental customers all over the world and advance patient care. With a strong financial profile, comprehensive product offerings and integrated solutions, DENTSPLY SIRONA will be uniquely positioned to deliver attractive returns for our shareholders and make dentistry better, faster and safer around the world. I look forward to working with Jeff and the combined management team to deliver on this mission."

Compelling Strategic and Financial Benefits

The proposed transaction will create the world's largest manufacturer of professional dental products and technologies with scale and breadth across all major geographies and competitive offerings in each of the major dental categories. Specific benefits include:

  • Increased Scale and Product Breadth: The combination will result in a company with net revenue of approximately $3.8 billion and adjusted EBITDA of more than $900 million, excluding the incremental benefit of synergies. The combined company will have the industry's largest sales and service infrastructure, supported by leading distributors. DENTSPLY SIRONA will also be positioned to provide market-leading solutions in every major dental category across consumables, specialties and equipment on a global basis.
  • Total Solutions Provider: With consumables, equipment and technology under one roof, the new company will be able to deliver digital technologies and integrated solutions and workflows to enhance efficiency and patient care for general practitioners and specialists.
  • Strong Commitment to Innovation: The combined company will have an enhanced commitment to innovation in consumables, equipment and technology. By leveraging both companies' significant R&D capabilities across DENTSPLY's world-class materials science expertise and Sirona's industry-leading technology platform, the broadened product offering will support the combined company's position as a leading innovator in the dental market. DENTSPLY SIRONA will have over 600 scientists and R&D staff working to accelerate the development of new, better, safer and more efficient dental solutions and procedures.
  • Financial Strength and Flexibility: The combined company will enjoy an attractive financial profile with robust cash flow for continued growth reinvestments and a focus on returning capital to shareholders. DENTSPLY SIRONA intends to execute a $500 million share buyback as soon as possible after closing to drive incremental shareholder value. The new company plans to maintain DENTSPLY's current dividend level of $0.29 per share.
  • Substantial Synergies: The combination of DENTSPLY and Sirona is expected to deliver $125+ million of annual pre-tax synergies by the third year following the completion of the transaction. The new company plans to achieve meaningful cost and revenue synergies by capitalizing on a broadened product offering, expanded customer base and scalable infrastructure. The combination is expected to unlock significant shareholder value and be accretive to each company's shareholders on an adjusted earnings per share basis within the first year.
  • Experienced Management Team: The combined company will be led by the most experienced management team in the dental industry, with strong track records of growth and leadership in developing differentiated global product offerings. The DENTSPLY and Sirona teams have a successful history of collaboration in a number of product categories, providing a strong foundation for the combined management team to accelerate growth.


The transaction, which is expected to be completed in the first quarter of calendar 2016, is subject to the receipt of regulatory approvals and other customary closing conditions. The transaction requires the approval of shareholders of both DENTSPLY and Sirona.


Moelis & Company LLC is serving as exclusive financial advisor to DENTSPLY, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as its legal advisor. Jefferies LLC is serving as exclusive financial advisor to Sirona, and Latham & Watkins LLP is serving as its legal advisor.

Conference Call and Webcast

The companies will hold a joint conference call and webcast today at 5:30 pm ET to discuss this announcement followed by a question and answer session. The conference call can be accessed by dialing (866) 610-1072 within the U.S. and (973) 935-2840 for all other locations. The live webcast will be available to interested parties via DENTSPLY's IR website at and Sirona's IR website at A presentation will accompany the conference call. These slides may be accessed on the DENTSPLY and Sirona websites. A replay of the webcast will be available for two weeks following the call. To access the replay, please dial (800) 585-8367 within the U.S. or (404) 537-3406 for all other locations. The Conference ID for the conference call and replay is 41327193.

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