Henry Schein, Inc.
), a leading healthcare products and services distributor, has
been on an acquisition spree over the recent past. The company
has successfully maintained this trend with the completion of the
acquisition of Ireland-based animal health product distributor
C&M Vetlink. This latest buy coincides with Henry Schein's
advanced strategic plan to expand its international footprint by
growing across new geographies, thereby retaining its position as
a major Pan-European distributor of animal health products and
services. Financial terms of the deal were not revealed.
At present, C&M Vetlink, one of the leading distributors
of veterinary and companion animal health products across
Ireland, has revenue of approximately €42 million or $54.7
million a year. C&M Vetlink, with around 70% of sales from
large animals, reveals the importance of dairy farming and
livestock in the Irish economy.
Henry Schein remains optimistic about the prospects of this
acquisition and expects this to further strengthen the company's
fastest growing animal health business (sales of $2 billion a
year). This venture has enabled Henry Schein to foray into
Ireland, an entirely new market for the company with substantial
market shares. The company expects the acquisition to be neutral
to slightly accretive to its fiscal 2013 financial
Henry Schein is focusing on expansion through acquisitions
both in animal health and dental market, based on its solid cash
balance ($89.3 million at the end of third quarter 2012). Earlier
in October, the company bought a majority stake in a Canada-based
privately-held dental software company, The Exan Group. Prior to
that, in May, the company entered into the Dutch market by
acquiring AUV Veterinary Services, the veterinary products
distribution arm of the Netherlands-based AUV Group.
The other recent acquisitions include a global distribution
agreement with Israeli dental technology company ReDent Nova, a
deal with non-invasive monitoring technology for patient care
) to distribute Masimo's Pronto-7 and three successive
acquisitions namely Ortho Technology, Modern Laboratory Services
Henry Schein continues to experience strong top-line growth
and has established a strong foothold in both the 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). Over the
long term we have a Neutral recommendation on the stock.
HENRY SCHEIN IN (HSIC): Free Stock Analysis
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