NASHVILLE, Tenn., March 6, 2019 /PRNewswire/ -- SmileDirectClub, the market leader and pioneer of doctor-directed, remote invisible aligner therapy, today announced the decision in the arbitration brought by SmileDirectClub against Align Technology Inc. (NASDAQ: ALGN) for violations of restrictive covenants among other claims.
After reviewing an overwhelming amount of evidence, Align was found to have breached the non-compete and other restrictive provisions applicable to the members of SmileDirectClub, including that Align misused SmileDirectClub's confidential information and violated fiduciary duties to SmileDirectClub. The ruling requires Align to close down all of its 12 Invisalign stores by April 3, 2019 and enjoins Align from opening any new stores or providing certain services in connection with the marketing and sale of clear aligners. Moreover, the expiration date of the non-compete provision has been extended to August 18, 2022. Align is also permanently enjoined from using SmileDirectClub's confidential information.
As part of the ruling, Align has been ordered to return its ownership stake back to SmileDirectClub for the price of its stated capital account balance as of October 31, 2017 – a price which is significantly below the fair market value of its investment given the valuation of $3.2 billion that SmileDirectClub obtained last summer. With this order Align will no longer be an investor in SmileDirectClub. This decision has no impact on Align's existing supply agreement with SmileDirectClub through 2019.
"We are extremely pleased with the outcome of the arbitration. This ruling validates the credibility of SmileDirectClub's business model to democratize confidence and provide our more than 400,000 customers with convenient and affordable access to care," said Alex Fenkell, Co-founder of SmileDirectClub. "This decision allows SmileDirectClub to stay focused on our growth and continue our mission to close the gap around access to orthodontic care in the U.S. and beyond."
Founded four years ago, SmileDirectClub is revolutionizing the process for getting a straighter smile. Today, the company is valued at $3.2 billion, employs more than 4,300 people, and has helped more than 400,000 people achieve their best smile.
SmileDirectClub was founded on a simple belief: Everyone deserves a smile they love. Recognizing an opportunity to increase access to dental care, the company pioneered the creation of cutting-edge platforms and technology for doctor-directed, remote aligner therapy. With a digital network of more than 240 affiliated licensed dentists and orthodontists overseeing customer treatment, from impressions made with an at-home kit or from a digital scan at one of the 200 SmileShops across the United States and Canada through the end of the customer's treatment, SmileDirectClub has made orthodontic solutions more affordable and convenient than ever before. SmileDirectClub was founded in 2014 by Alex Fenkell and Jordan Katzman in partnership with Camelot Venture Group, whose portfolio companies include 1-800 CONTACTS and Quicken Loans, and is based in Nashville, Tennessee. For more information, visit SmileDirectClub.com.