Good morning. The hard-hitting investigators at The New York Times have unmasked the Tooth Fairy.

She’s actually Dr. Purva Merchant, a Seattle pediatric dentist whose decade-old “tooth fairy” email has received and responded to roughly 6,000 messages from hopeful kids and frantic parents. No wand. Just espresso, a white coat, and a busy inbox.

Inside this issue:
- Industry titan steps aside
- The specialty land grab

⏰ Your reading time today: 5 mins 3 seconds

👑  Enjoy your coffee break with Word of Mouth, a dental-themed word game inspired by Wordle … guaranteed to leave you grinning, not grinding! Congrats to Dr. Janet Century of Imagen Dental Partners and Zach Anderson of Onederful Finance, for joining this week’s leaderboard.

MARKETS

📉 3D Systems Corp ($DDD) – 1.78 | -0.050 (2.73%)
📈 Align Technology ($ALGN) – 207.19 | +16.64 (8.73%)
📉 Colgate-Palmolive ($CL) – 86.47 | -0.40 (0.46%)
📈 Dentsply Sirona ($XRAY) – 16.07 | +0.12 (0.75%)
📈 Envista Holdings ($NVST) – 20.74 | +1.18 (6.03%)
📈 Henry Schein ($HSIC) – 70.46 | +0.20 (0.28%)
📈 Straumann Holding AG (STMN.SW) – CHF 108.70 | +3.85 (3.67%)
📉 Weave Communications ($WEAV) – 7.72 | -0.13 (1.66%)

Data is provided by Google Finance. Stock data reflects market close at 5:00 p.m. ET, showing changes over the past five days.

THE DRILL DOWN

⚠️ CareQuest says House-passed Medicaid bill will cut dental access for millions, warning the budget package includes deep funding cuts, work requirements, and caps that could strip coverage from 12 million people. From the operatory to the ER. 

🦷 Congress introduces TEETH Act to protect fluoridation policy, requiring EPA to base decisions on independent, peer-reviewed evidence amid rising misinformation.

⚖️ MetLife agrees to overhaul dental recoupment policies after ADA intervention, pledging to stop aggressive recovery demands following ADA’s formal letter to the insurer.

🧾 ADA urges changes to NCOIL Dental Loss Ratio model, calling for transparency to ensure insurers spend more on patient care versus administrative costs. 

📊 Health Policy Institute finds U.S. dental economy in holding pattern, with frozen practice growth and mounting overhead squeezing margins nationwide.

LEADERSHIP & LEGACY

Industry titan steps aside

After more than three decades at the helm, Stanley Bergman will retire as CEO of Henry Schein at the end of 2025. His 35-year run makes him one of the longest-serving executives in healthcare, credited with transforming a regional dental supplier into a global distribution giant. But his exit comes at a moment of significant reform, with Schein’s recent performance under investor scrutiny. 

Let’s jump into Bergman’s legacy, the state of the behemoth he built, and what this transition signals for DSOs watching their largest supplier chart a new course. Hats off to a legend!

What happened: Henry Schein launched a formal search for a new CEO after Bergman announced he’ll step down as CEO at the end of 2025 and remain chairman of the board. The decision follows a period of activist investor pressure, flat stock performance, and growing scrutiny over the company’s future.

The announcement was paired with news earlier this year that private equity firm KKR has taken a 12 percent stake in Henry Schein and secured two board seats, as well as a committee role related to CEO succession. 

A legacy built on growth: Bergman joined Henry Schein in 1980 and became its first non-family CEO in 1989. Under his leadership, the company expanded from a mail-order dental distributor with $225 million in revenue to a $13 billion global operation serving over 1 million healthcare providers across 32 countries.

Key milestones include:

• Leading the company’s IPO in 1995 and joining the S&P 500

• Expanding into medical distribution, digital software, and specialty products

• Building out global public-private partnerships focused on access to care

• Launching the BOLD+1 strategy to shift Schein toward higher-margin segments like implants, endo, and private-label goods

Bergman’s vision was long-term, purpose-driven, and often personal, as outlined in his internal memo to staff announcing his retirement. 

But headwinds gathered: In recent years, Henry Schein has faced rising pressure. Revenue grew, but margins thinned. Some investor opposition to company plans started to appear. 

In 2023, a ransomware attack disrupted operations and exposed patient data, costing an estimated $350 to $400 million in lost sales. Meanwhile, costs ballooned and investor patience wore thin.

Enter Ananym Capital, an activist fund that launched a campaign in late 2024 demanding a board refresh, new CEO, cost cuts, and a possible divestiture of the medical business. Ananym prepared a proxy fight to take up to six board seats. That threat likely accelerated the KKR “white knight” deal.

Where Schein stands now:

• Flat stock performance over the last 12 to18 months

• Restructuring plan under way to cut up to $100 million in costs

• Strong brand loyalty among dental customers, but growing competition from leaner, tech-first rivals

• Ongoing integration of recent acquisitions, including Acentus, into the broader supply chain and specialty portfolio

• KKR’s presence signals a pivot. The firm brings deep dental experience from its ownership stakes in Heartland Dental and 123Dentist. 

What this means: Schein has been one of the leading “default” suppliers for decades, but DSOs have more options now, and thus more leverage. As the company navigates its leadership transition and sharpens its focus, customers may see shifts in pricing, service, and strategic alignment.

With KKR’s involvement and near leadership, expect Schein to double down on its most profitable segments, thin out or depart from less profitable segments, lean harder on high-margin tech products, and look for new ways to lock in large enterprise clients. 

But until a new CEO is named and strategy clarified, the company will likely be in a transitional posture, continuing to watch margins, manage investor expectations for change, and likely saying “no” to new initiatives.

Looking ahead: Bergman’s legacy is hard to overstate. He shaped an entire segment of dental commerce and technology, helped define the modern supplier-DSO relationship, and kept Henry Schein at the top of the industry longer than most competitors lasted. 

But the next era will look different. The question now isn’t whether Schein will stay relevant. It’s who will take the wheel next and whether they can steady the ship in choppier seas. 

In the meantime, hats off to the captain of the ship, Stanley Bergman, who kept the ship afloat and growing for over three decades.

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BUSINESS BITES

📈 Planet DDS reports 28% year-over-year growth, citing record client retention and software adoption growth across group practices.

👔 Dentsply Sirona names Daniel Scavilla as new CEO, promoting the longtime exec to lead its global strategy and operational turnaround.

🤝 ZimVie announces acquisition by ArchiMed, with the European firm expanding its U.S. device footprint under a definitive agreement.

📈 Ontario Teachers’ Pension Plan Board agrees to acquire leading Spanish DSO Donte Group, marking a continued push into dental investments, having already retained an ownership share in Heartland Dental. ¡Salud!

💸 vVARDIS raises $50M to expand drill-free early decay treatment Curodont, following what it says is positive U.S. uptake, including purchases by 10% of all U.S. dental offices since launch. Prevention scales.

BUSINESS STRATEGY

The specialty land grab

In dentistry’s new frontier, the gold isn’t underground. Instead, it’s under specialty referral codes. Like the settlers of yore eyeing untapped land, DSOs are moving fast to stake their claims in the dental specialties.

Across the U.S., DSOs are making bold moves into the specialty space. Whether through new specialty-only platforms or expanding existing networks, the race to integrate high-margin, high-demand procedures is picking up speed. Let’s explore what’s behind the trend and what you can do to stay ahead.

What’s happening: A growing number of DSOs are pivoting toward specialty care. Some, like Smile Doctors and Beacon Oral Specialists, are building platforms exclusively around orthodontics or oral surgery. Others, like PDS, are embedding specialists into general practice footprints or launching co-branded specialty divisions. Integration models range from in-office rotations to dedicated hubs and joint ventures.

Why it’s happening: For some DSO leaders, referrals look a lot like revenue walking out the door. Specialty procedures like implants, endo, and ortho carry higher margins and stronger insurance coverage. By keeping these in-house in a hybrid specialty-general DSO model, DSOs boost same-store growth and raise patient lifetime value.

Investors and purchasers have noticed. Specialty practices are commanding purchase prices that represent significant multiples of EBITDA, compared to general dentistry. More importantly, they’re hypothesized to be even more recession-resistant than general dentistry.

The rise of specialty-only DSOs is also being driven by these same economics. Focused platforms can streamline operations, concentrate branding, and dominate a single vertical with deep clinical expertise. These groups often appeal to younger specialists burdened by debt, looking for strong income, lifestyle balance, and clinical focus without the burdens of solo ownership. For investors, specialty DSOs offer simplicity: a clean, high-margin business model in a fragmented market with room to roll up and scale.

The investor angle: Private equity groups are always hunting for margin and durability. That’s why they got into dentistry, and now why they are getting deeper into specialities. Specialty DSOs offer both margin and sustainability, with repeatable procedures, tech-enabled delivery models, and fragmented landscapes ripe for roll-up. Hybrid general-specialty DSOs, meanwhile, can be valued for revenue diversity, internal referral control, and future-proofing.

Sticky business: Multi-specialty platforms are built to retain. When a DSO delivers hygiene, ortho, implants, and pediatric care within one system, the patient experience becomes simpler to navigate and harder to leave. Referrals stay internal. Families grow up inside the platform. The patient relationship deepens with each visit, creating habits that are difficult to disrupt.

The pitfalls: Specialty expansion looks good on paper. In practice, it can drag down even well-run platforms if execution falters.

• Culture clash: Specialists often value autonomy and clinical control. Without alignment, integration can feel like a downgrade to a specialist.
  

• System sprawl: Merging different EHRs, imaging tools, and workflows creates friction. Disconnected systems slow teams down.
  

• Scheduling strain: Traveling specialists and shared chair time require precision. Poor coordination leads to empty slots and lost revenue.
  

• Recruiting risk: Talent is limited. Specialists are selective. A weak brand or misaligned model makes hiring harder and more expensive.
  

• Financial drag: Overpaying for acquisitions, underestimating integration costs, or losing key producers can hit EBITDA and erode value.

Looking ahead: Whether this becomes a permanent reshaping of the DSO model or simply a major growth phase remains to be seen. But for now, specialty integration is one of the most active strategic plays in the market. The trend is big, the investor appetite is real, and the competitive stakes are rising. But will it work for your DSO? Let’s refer you to a specialist for that one.

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CLINICAL NOTES

🧠 Study links specific oral bacteria to cognitive health, showing Neisseria and Haemophilus tied to better memory while Porphyromonas and Prevotella intermedia are linked to mild cognitive impairment and APOE4 risk. Your tongue may be the tip of your brain.

🤖 HKU Dentistry unveils AI that predicts juvenile cavity risk at the individual tooth level with 93% accuracy, enabling earlier, targeted prevention for children.

🧪 AI models GPT‑4o and Grok-2 excel at UK dental exam questions, though LLM-generated assessments still falter in comparison to humans. Looks like AI’s brushing up.

🔬 Research identifies a protein that inhibits Streptococcus gallolyticus, the oral microbe also linked to colorectal cancer, opening doors for targeted antimicrobial approaches.

BEYOND THE CUSP

• Humans used to have straighter teeth—what changed? 

• The dirtiest parts of hotel rooms, according to housekeepers.

• 7-Eleven is giving out free tongue tattoos to celebrate its 98th birthday. 

• These European islands have 24 hours of daylight in summer.