SmileDirectClub IPO: An Alternative to Traditional Orthodontics

Featured under High-Growth Healthcare IPOs in our 2019 Fall IPO Preview: SmileDirectClub (SDC) is this week's largest offering, raising a proposed $1.2 billion at a market cap of nearly $8.0 billion. Over half of proceeds are going to insiders. Backed by CD&R, SmileDirectClub has rapidly grown to $622 million in trailing sales by offering clear teeth-straightening aligners that are more convenient and affordable than many existing options. Its direct-to-consumer model targets a massive global market, but the company is burning through cash, while competitors are joining the fray.

An alternative to traditional orthodontics, SmileDirectClub provides convenient and affordable teeth-straightening kits, featuring home-delivered tools and remote guidance. The company has served over 700,000 members since its 2014 inception and launched in three international markets in the last 12 months. SmileDirectClub is growing fast (+113% y/y) with $622 million in trailing sales, strong gross margins (75%) and newly-positive EBITDA.

Bookrunners: J.P. Morgan, Citi, BofA Merrill Lynch, and three others.

Read about other healthcare IPOs to watch out for in our 2019 Fall IPO Preview.