Principal Financial Group Acquires DentaNet: Enhancing Dental Network in Alabama
Principal Financial Group has reached an agreement with Southland Benefit Solutions to acquire DentaNet, Alabama's largest dental provider network. The acquisition also grants Principal the renewal rights for a set of group insurance contracts under Canopy Insurance. Both Southland Benefit Solutions and Canopy Insurance operate under Collateral Holdings, LLC, based in Birmingham, Alabama. The financial terms of this transaction remain undisclosed.
DentaNet, a single-state network, includes around 1,500 dental providers across Alabama. This acquisition will integrate DentaNet into Principal's existing collection of dental networks, featuring Principal Preferred Provider Network, Diversified Dental Services, and First Dental Health. As of the end of 2025, Principal provides over 60,000 employer dental plans covering nearly 2.8 million participants.
Kara Hoogensen, Senior Vice President of Workplace Benefits at Principal, emphasized that this transaction aligns with the company’s strategic growth objectives. She explained that the expansion of their dental network in Alabama reinforces their dedication to growth in the small and midsized business market, enhancing their dental segment.
Hoogensen also highlighted that the acquisition would bolster Principal’s local presence. She stated that the strong regional network would enhance dental competitiveness and encourage sustainable growth. Furthermore, Principal intends to continue delivering high-quality services to existing clients and integrate DentaNet and Canopy providers smoothly into their systems.
Jonathan Ratliff, CEO of Collateral Holdings, LLC, expressed satisfaction with the deal, noting that it preserves the accomplishments of the subsidiaries while allowing future growth under different frameworks. According to Ratliff, Principal’s commitment to service will help carry forward the legacy established by Canopy and DentaNet. Southland Benefit Solutions (SBS) will remain dedicated to its TPA clients.
Perella Weinberg Partners provided financial advice to Principal, with Skadden, Arps, Slate, Meagher & Flom LLP serving as legal counsel. Sherman & Company acted as financial advisor to Collateral Holdings, with Maynard Nexsen PC offering legal counsel.
This transaction coincides with a strong performance from Principal's Specialty Benefits division. According to their 2025 full-year earnings report, the segment reported a 16% operating margin, showing a 170-basis-point improvement from 2024. The growth was attributed to strong underwriting conditions across various group benefits.
Furthermore, the company reported a 12% increase in adjusted non-GAAP earnings per share for the year, aligning with their expectations, while reported EPS grew nearly 20%. These results reflect favorable market conditions and robust underwriting practices. The incurred loss ratio for the year stood at 57.6%, below the company's target range.
Looking into 2026, Principal has set a Specialty Benefits loss ratio target range of 60% to 64%, anticipating reaching the lower end through strategic pricing and network optimization. Principal Financial Group (Nasdaq: PFG), headquartered in Des Moines, Iowa, is a global financial services company with a long-standing presence in the industry. Collateral Holdings, LLC has been part of the insurance sector for over 93 years.