Health care products and services provider
Henry Schein, Inc.
) has recently bought a majority stake in a Canada-based
privately-held dental software company, The Exan Group. This latest
buy coincides with the company's plan to expand via acquisitions
and partnerships. Financial terms of the deal were not
This venture remains consistent with the company's advanced
strategic plan to expand its domestic and international footprints.
The acquisition has enabled Henry Schein to further expand its
business with dental schools in the U.S. and Canada, along with
general practice dental offices in Canada.
Henry Schein believes that this acquisition will have no impact
on the company's financial results till fiscal 2013. However, the
company expects the transaction to be accretive
Port Coquitlam, British Columbia-headquartered Exan currently
has annual sales of $11.7 million, 75% of which is made up by the
company's dental management software - axiUm. This product has been
distributed to 65 dental schools in the U.S. and Canada. The
company's Power Practice software solution is sold to 750 practices
in the U.S. and Canada and represents 23% of total revenues.
The firstborn segment of the baby boom generation, initiated in
2011, marked the beginning of an important demographic shift for
worldwide dentistry. This trend is expected to gain further
momentum over the next 20 years with increasing demand from senior
baby boomers. Henry Schein estimates that the population aged 45 or
more will grow 14% and 27% within the periods 2011−2021 and
2011−2031, respectively. According to the World Dental Forum held
in 2012, this also led to the international integration of the
As a result, Henry Schein is currently focusing on global
expansion through strategic partnerships and acquisitions. In July,
the company made three successive acquisitions namely U.S. based
Ortho Technology and Modern Laboratory Services and Thailand based
full-service dental distributor Accord. In the same month, it
entered into a global distribution agreement with Israel-based
dental technology company ReDent Nova. The latest addition of Exan
is in pursuance of this strategy.
Henry Schein's portfolio consists of consumable products, small
equipment, laboratory products, large dental and medical equipment,
equipment repair services, branded and generic pharmaceuticals,
vaccines, surgical products, diagnostic tests, infection-control
products and vitamins.
The company continues to experience strong top-line growth and
has established a robust foothold in both domestic and
international markets in dental, veterinary and medical supply
distribution. We are also encouraged by the company's focus on
improving its cost structure to drive profitability.
Henry Schein's performance should improve further with the
gradual recovery in the economic outlook. However, the company
faces stiff competition from the likes of
Patterson Companies Inc.
). The stock retains a short-term Zacks #3 Rank (Hold).
HENRY SCHEIN IN (HSIC): Free Stock Analysis
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