Principal to acquire Alabama’s DentaNet
Principal Financial Group has announced a definitive agreement with Southland Benefit Solutions to acquire DentaNet, the largest dental provider network in Alabama, while also securing renewal rights for a block of group insurance contracts through Canopy Insurance.
Both Southland Benefit Solutions and Canopy Insurance are subsidiaries of Collateral Holdings, LLC, a Birmingham, Alabama-based holding company. Financial terms of the transaction were not disclosed.
DentaNet operates a single-state network of approximately 1,500 dental providers across Alabama. The acquisition would bring DentaNet into Principal’s portfolio of wholly owned dental networks, which includes Principal Preferred Provider Network, Diversified Dental Services, and First Dental Health.
As of Dec. 31, 2025, Principal serves more than 60,000 employer dental plans, providing dental coverage to nearly 2.8 million participants, according to a news release.
Kara Hoogensen, senior vice president of workplace benefits at Principal, said the deal reflects the company’s broader growth strategy.
“Our specialty benefits business is a critical growth engine for Principal,” Hoogensen said. “Expanding our dental network and group benefits presence in Alabama shows our commitment to continuing above-market growth in the small and midsized business market and growing our dental business.”
She added that the acquisition is expected to strengthen Principal’s regional standing.
“We expect this strong dental network to improve dental competitiveness and drive sustained growth,” Hoogensen said. “These strategic investments strengthen our presence in the Southeast by pairing our nationally recognized brand and deep expertise with Southland’s and Canopy’s localized service model and provider relationships.”
Principal also said it looks forward to maintaining services for existing customers and providers.
“We look forward to continuing the strong service to both Canopy’s customers and DentaNet’s providers and are excited to welcome them to Principal,” Hoogensen said.
Jonathan Ratliff, CEO of Collateral Holdings, LLC, said the deal preserves what both subsidiaries have built while allowing each to move forward under different structures.
“We are proud of what our teams at Southland Benefit Solutions and Canopy Insurance have built for Alabama’s employers and dental community,” Ratliff said. “Principal’s deep commitment to service will carry that legacy forward for Canopy and DentaNet’s customers, while SBS remains fully committed to its TPA customers.”
Perella Weinberg Partners served as financial advisor to Principal, with Skadden, Arps, Slate, Meagher & Flom LLP acting as legal counsel. Sherman & Company served as financial advisor to Collateral Holdings, LLC, with Maynard Nexsen PC acting as legal counsel.
The deal comes as Principal’s Specialty Benefits division reports strong momentum.
In its full-year 2025 earnings report, released February, Principal said its Specialty Benefits segment posted a full-year operating margin of 16%, a 170-basis-point improvement over 2024, driven by what the company described as strong underwriting experience. In the fourth quarter alone, the segment’s operating margin reached 17%, supported by favorable results in group life, group disability, and group dental.
Adjusted non-GAAP earnings per share rose 12% for the full year, at the high end of the company’s target range, while reported EPS growth reached nearly 20%, according to a Yahoo Finance summary of the Q4 earnings call.
The company credited the performance to favorable market conditions, strong underwriting results in Specialty Benefits, and disciplined expense management. The segment’s incurred loss ratio came in at 57.6% for the full year, below its targeted range.
For 2026, Principal set a Specialty Benefits loss ratio target of 60% to 64%, with management stating it expects to reach the low end of that range through pricing actions and network optimization, per The Motley Fool’s transcript of the Q4 earnings call.
Principal Financial Group (Nasdaq: PFG) is a Des Moines, Iowa-based global financial company. Collateral Holdings, LLC has operated in the insurance and insurance services sectors for 93 years.
