Mid-market private equity firm Palamon Capital Partners has acquired a majority stake in Associated Dental Practices for £136 million.

Mid-market private equity firm Palamon Capital Partners has acquired a majority stake in Associated Dental Practices for £136 million.

Associated Dental, the second largest provider of NHS dentistry in the UK, was acquired from the administrators of Kaupthing Capital Partners, the former private equity arm of the collapsed Icelandic bank.

Other investors in the deal are AlpInvest Partners, Morgan Stanley Alternative Investment Partners and LDC. Together, the acquirers invested £72 million.

The acquisition also involved a refinancing of the business with a senior debt package of £37.5 million from Lloyds TSB and Royal Bank of Scotland. The two banks have also made available ‘a significant acquisition facility’ to support Associated Dental’s future expansion.

Bharat Patel, CEO of Associated Dental, says, ‘We have ambitious plans to increase further the number of NHS dental practices within the ADP Group and to extend the range of services we offer patients.’

The deal is the thirteenth investment made by Palamon’s second fund, Palamon European Equity II, which has now committed most of its €670 million (£610 million).