Chinese language Angelalign buys management of Brazilian Aditek for US$ 19.4 million
- October 30, 2022
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Chinese Angelalign arrives in Brazil by buying 51% of the operation of Aditek, a São Paulo company that manufactures and sells transparent dental aligners
A new M&A should make a lot of people smile again. The Chinese Angelalign announced this Friday, October 28, the purchase of 51% of the operation of Aditek, a Brazilian manufacturer of orthodontic appliances and dental aligners. The transaction moved US$ 19.4 million.
The deal had been in the works for a few months. As dealthe Chinese company, listed on the Hong Kong stock exchange and valued at around US$ 1.6 billion, will have Aditek as the local player to offer its own aligners.
“This is their first investment outside China and will give access to the market that has the largest number of dentists in the world”, says Eduardo Lopes, CEO of Aditek, to the NeoFeed. He will continue in charge of the operation. “Their bet is that the Brazilian market will follow the path already taken by China in this segment.”
Founded in 2003 by Huamin Li, Angelalign is one of the main competitors of the market leader Align Technology, the American responsible for Invisalign brand aligners, and valued at US$ 14.1 billion.
Before going public, in June last year, the Chinese company raised just over US$ 23 million from investors such as Warburg Pincus and Orbi Med. Open market performance has been turbulent. Since the IPO, the shares have already dropped about 78%.
In 2021, the company reported revenue of 1.2 billion yuan (US$165 million), which represented a growth of 55.7%. In the first half of 2022, revenue was 570.9 million yuan (US$78 million).
Aditek, in turn, was founded in 1990 by the couple of orthodontists Alexandre and Dilza Lopes. The company has spent more than two decades operating in the manufacture of orthodontic appliances. In 2011, when Eduardo, the couple’s son, joined the operation, the company decided to enter the aligners market.
In 2019, under the command of Eduardo, Aditek began to intensify the operation of aligners, which today represent 20% of revenue and should exceed the level of 50% in 2023.
The terms agreed in the deal specify that, at least initially, Aditek will remain operating under its own brand and will not stop manufacturing and offering its own Self-branded aligners. Aligners produced by Angelalign will be offered as a consumer option.
In the long term, other changes that can be implemented are the use of technologies developed by Angelalign and the adoption of new suppliers of imported components for the manufacture of aligners. An example is the plastic used in Aditek’s aligners, which today is imported from a German company.
“We will have these resources to occupy a larger space in this market”, says Eduardo. According to the executive, the money will be invested in marketing, sales and the completion of the construction of the company’s new factory.
Located in Cravinhos, in the metropolitan region of Ribeirão Preto, in São Paulo, the new unit is already under construction and should start operating between March and April 2023. With an investment of around R$ 30 million, the structure will have production capacity up to ten times larger than the current factory, which is also located in the same municipality.
The expectation is that the investment will strengthen the company in the competition with Invisalign branded devices. Worldwide, the American company claims to have treated more than 12 million patients.
There are also other rivals, such as the Brazilian SouSmile, which has raised almost US$ 29 million with investors such as Canary, Kaszek and Global Founders Capital; and Smilink, purchased in August last year by the Swiss group Straumann, for an undisclosed amount.
The clear dental aligners market is growing at a fast pace. In the United States, data from the consultancy Grand View Research indicate that the segment should grow from a revenue of US$ 2.6 billion in 2020 to US$ 32.3 billion in 2030.
In Brazil, the market is leaner. According to Eduardo, less than 10% of orthodontic cases here are treated with aligners, while in the United States this percentage is close to 30%.
What gets in the way, in many cases, is still the price. Depending on the company chosen, the treatment, which takes 6 to 18 months, can cost more than R$12,000.