) completed the previously announced acquisition of the National
Veterinary Services Limited (NVS) for $135 million. NVS is the
largest veterinary distributor located in the U.K. It was a fully
owned subsidiary of Dechra Pharmaceuticals PLC and will now
operate as a stand-alone subsidiary of Patterson.
The acquisition is expected to expand the geographic reach of
PDCO's Veterinary business. We believe that NVS' various
offerings, including reference laboratory products, should enrich
Patterson's product portfolio. Upon the completion of one year
after the closure of the deal, it is projected to boost PDCO's
earnings by 4-5 cents (including one-time expenses).
Patterson's Veterinary Supply unit is seen as a key long-term
growth driver. However, the business is posting disappointing
results, despite tailwinds in the underlying market. This is due
to a change in distribution agreement related to nutritional
offerings in 2012.
We believe that the recent tailwind in the North American
veterinary market provides ample opportunity for the company to
grow. Patterson is also investing in technologies to boost the
profitability of its veterinary business. Apart from the
macroeconomic factors, the company needs to improve internal
execution to avoid loss of market share in the veterinary
business to competitors.
In early 2013, PDCO's Veterinary business acquired
Calif.-based Universal Vaporizer Support, a supplier of cleaning
and calibration services for anesthetic vaporizers used in
Recently, on Jul 31, Patterson Dental, the company's core
business, acquired Mercer Mastery, a unit of Mercer Advisors.
Patterson Dental acquired the entity to leverage its software
products portfolio with Mercer's flagship product, the OnTrack
dental practice performance software system.
PDCO has a Zacks Rank #2 (Buy). The company is slated to
report its first-quarter fiscal 2014 results on Thursday, Aug 22.
Medical stocks such as
MWI Veterinary Supply
The Cooper Companies
) are worth a look. All these stocks carry a Zacks Rank #2
ALIGN TECH INC (ALGN): Free Stock Analysis
COOPER COS (COO): Free Stock Analysis Report
MWI VET SUPPLY (MWIV): Free Stock Analysis
PATTERSON COS (PDCO): Free Stock Analysis
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