Patterson Dental, the core business under
), has acquired Mercer Mastery, a unit of Mercer Advisors. The
deal was completed on Jul 31 but no financial details were
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Patterson Dental acquired the entity to leverage its software
products portfolio with Mercer's flagship product, the OnTrack
dental practice performance software system. The software is a
cloud-based business intelligence system that enhances practice
performance of dentists. Management also plans to extend the use
of this software across its other businesses (Veterinary and
Rehabilitation) in the long term to boost revenues.
The acquisition will not have any financially material impact on
Patterson. However, the acquisition is in line with the company's
long-term strategy to grow through internal expansion and
One of the two largest distributors of dental offerings in North
America, Patterson Dental provides a wide range of consumables,
equipment and software, and value-added services to its
customers. Although patient demand for dental services was tepid
at the height of recession, Patterson should benefit from the
gradual recovery in the dental market.
We also remain upbeat about the prospects of the dental equipment
business (especially CEREC) and the distribution agreement with
Sirona Dental Systems
). Further, the company's promotional activities should result in
higher demand for this product category moving ahead.
In July, the company had also entered into an agreement to buy
the largest veterinary distributor located in UK, the National
Veterinary Services Limited (NVS) for $135 million. The
acquisition is expected to expand the geographic reach of its
Veterinary business. The deal is slated to close this month. 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
PDCO currently has a Zacks Rank #2 (Buy). Other medical stocks
that are worth considering include
The Cooper Companies
). Both these stocks also carry a Zacks Rank #2 (Buy).