Henry Schein, Inc.
) recently forged an agreement to buy an 80% stake in
privately-held Medivet S.A., a leading distributor of animal
health products and services in Poland. The Polish company
registered sales of $80 million in 2012.
Though the financial terms of the transaction are yet to be
disclosed, Henry Schein expects the acquisition to be dilutive to
its earnings per share by approximately 1 cent in the year of
acquisition and accretive by 1 to 2 cents in the following
year. The transaction is expected to be sealed in the first
quarter of 2014, subject to the approval of Poland's competition
and tax authorities.
The Global Animal Health business of Henry Schein has been
performing steadily for the last few years and has accounted for
almost 27% of the company's worldwide sales in third-quarter
Poland is the sixth largest economy in the European Union with a
strong annual income growth rate. It is interesting to note that
Poland has an estimated number of 13 million pets. Thus, it is
not surprising that HSIC has chosen the country, foreseeing the
potential that it has for its Animal Health business.
Henry Schein is the world's largest provider of health care
products and services to office-based dental, animal health and
medical practitioners. The animal health business of this global
giant operates in 11 European countries. Poland thus marks its
12th European market.
Henry Schein seeks to expand its global footprint in this vital
market through acquisitions as well as organic growth.
Additionally, Henry Schein looks forward to strengthen its
existing business across Eastern Europe as Medivet has a large
animal-health customer base of 2,200, spread all across Poland.
Medivet and its customers are also expected to benefit from this
acquisition. The availability of high-quality products and
supplies from HSIC will enable the company to serve its
established customer base in Poland in a more competent manner,
thus resulting in enhanced business and growth.
We believe that such inorganic developments will eventually boost
operational growth for Henry Schein in the long term.
Currently, Henry Schein carries a Zacks Rank #3 (Hold). However,
some better-performing stocks that are worth a look include
Align Technology Inc.
), both with a Zacks Rank #1 (Strong Buy) and
Cardinal Health, Inc.
) carrying a Zacks Rank #2 (Buy).
ALIGN TECH INC (ALGN): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
HENRY SCHEIN IN (HSIC): Free Stock Analysis
MCKESSON CORP (MCK): Free Stock Analysis
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