Union Dental Holdings Inc. (OTCBB: UDHI) announced today that they have entered into a purchase agreement to acquire Jakubek Dental in Charlotte, NC. This comes as a very pleasant surprise for us after the company hit a rough patch a few months back in its drive to buy out Bellflower Dental in Southern California.

This deal just makes sense on so many levels. For starters, UHDI holds an exclusive contract with the Association of Flight Attendants - Communications Workers of America (AFA-CWA). The union represents employees of airlines ranging from US Airways to Alaska Airlines and Charlotte NC is a mega hub for many popular airlines.

While UDHI has expanded its network of affiliated dentists that pay the company annual fees for access to areas of exclusivity to more than 1,800, the company should be able to improve an already solid profit and revenue situation by establishing their own dental practices in key strategic areas.

Saving Money for Union Workers!

From what I've seen, the typical Porcelain-fused-to-metal dental crowns ranges in price from roughly $600 to $900. With the proven ability to manufacture crowns and bridges about 20% - 30% cheaper than anybody out there, UDHI should be able to improve on its already solid revenue and profit situation by producing them in-house at multiple locations throughout the country.

Since union workers typically receive only $1,500 in annual allowable dental expenditures - a 30% discount pretty much brings any worker in one of UDHI's coverage areas through the door. How about that for a competitive differentiator for the company and a value-prop in new markets. In my opinion, if UDHI can pull off a few of these and run them efficiently, the sky is the limit for the company.

A Word from UDHI's CEO on the Announcement

Speaking on today's news, Dr. Green, President and CEO of Union Dental, commented:

'We have tremendous support from the labor unions and UDHI wants to capitalize on its 20 year relationship with these unions of providing quality dentistry to CWA members. I have personally met with the presidents of the local chapters of these unions and have their complete support in an effort to establish a premier dental facility to service the needs of these loyal union members. This new facility will be state-of-the-art in dental delivery with plenty of room for future expansion. The practice is currently profitable, low sale priced, and the addition of this new business clientele will make success a virtual certainty. I plan on interviewing doctors for associate positions next month as well as supportive staff."