In a bid to strengthen its dental and technology lines of
business in Europe,
Henry Schein, Inc.
) forged an agreement to fully acquire five healthcare businesses
operating in three European countries, from Arseus NV. Together,
these five businesses of Belgium-based Arseus represent annual
sales of approximately $97 million (€70 million).
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The deal is valued at $68.07 million (€50 million). Henry Schein
expects the acquisition to be dilutive to its earnings per share
by approximately 3 cents in 2014. The company expects to seal the
transaction within the next 90 days.
The businesses which are to be acquired by HSIC include Logiciel
Julie, a French dental practice management software company with
more than 8,000 installed systems and annual sales of
approximately $7.9 million (€5.7 million), and four other
distributors of dental equipments, practices, related consumables
and IT solutions.
Among the four other companies, the first one is Arcade Dentaire,
again a French based distributor of dental equipment, related
consumables and IT solutions. Arcade Dentaire has exclusive
distributorship rights for a number of premier dental
manufacturers in the region, including Sirona. It has annual
sales of approximately $11.0 million (€8 million).
The second one is Netherlands-based Arseus Dental Solutions BV,
with annual revenues of $14.1 million (€10.2 million). The other
two are Arseus Dental Solutions N.V. of Belgium with annual
revenues of $10.9 million (€7.9 million), and Arseus Lab, a
leading distributor of specialist products to dental laboratories
in Benelux and France, with annual sales of approximately $52.7
million (€38.2 million).
Following the announcement, HSIC revised its 2014 financial
guidance expecting diluted EPS to range between $5.29 and $5.39,
representing a rise of 8% to 10% from the midpoint of the 2013
guidance range. The Zacks Consensus Estimate for 2014 is pegged
at $5.41 per share.
Despite the austerity measures plaguing Europe, Henry Schein is
optimistic about this acquisition deal. The company looks forward
to gain access to the top manufacturers in the region, through
the wide network tapped by the four distributor companies of
HSIC also expects to benefit from the superior brand value and
strong market presence enjoyed by the Arseus businesses in the
European dental market. It expects the deal to equip it better to
serve customers with new, innovative and integrated dental
Currently, Henry Schein carries a Zacks Rank #3 (Hold). Investors
interested in the medical dental supplies industry can look at
better-ranked stocks like
Align Technology Inc
Cardinal Health, Inc.
Alphatec Holdings, Inc
), each carrying a Zacks Rank #1 (Strong Buy).