Sentinel trades fast food for dental hygiene

The New York-based private equity firm has made the first investment from its third fund and has exited a fast food franchise business.

New York-based private equity firm Sentinel Capital Partners has sold its stake in a Church’s Chicken franchise business and purchased a Minneapolis, Minnesota-based dental business. Details of the transactions were not disclosed.

Sentinel is selling Chicago-based Falcon Holdings, which operates 101 Church’s Chicken franchises throughout the Midwest, to the company’s CEO Aslam Khan, also a partner in the investment. Sentinel purchased Falcon in 1999 with around $8.2 million in equity. The investment came from the firm’s second fund, which closed on $126 million.

According to John McCormack, a co-founder and senior managing partner at Sentinel, the franchises had a negative cash flow in 1999, prompting the new owners to make improvements to the restaurants and staff with the help of Khan, who had worked his way up through the Church’s chain.

The firm also announced their investment in dental clinic operator MetroDentalcare, which operates 23 offices in the Twin Cities-area. Sentinel previously invested in Castle Dental Centers, a similar platform that Sentinel sold to Bright Now! Dental earlier this year.

James Cody, a principal with the firm, said Sentinel was interested in the dental industry, pointing to an aging population that is increasingly keeping its natural teeth, as well as the increase in cosmetic dental procedures.

“It has shown the ability to grow organically,” Cody said, adding that the business would also make opportunistic acquisitions.

David Lobel, founder and managing partner at Sentinel, said that the MetroDentalcare is the third deal the firm has done in Minnesota in the last five years. The clinics had previously been owned by an insurance company. 

MetroDentalcare is the first investment made from Sentinel Capital Partners III, which closed on $319 million in April.