Markets

Henry Schein's Merritt Buyout to Boost U.S. Veterinary Arm

An image of a smartphone and a pen
Credit: Shutterstock photo

Leading veterinary product distributor Henry Schein, Inc.HSIC continues to expand its global footprint successfully through several partnerships and acquisitions. Latest on the list is the company's agreement to buy Merritt Veterinary Supplies, Inc., an independent, family-owned supplier of animal health products. Although, financial terms of the deal have been kept under wraps, the company declared that it expects the transaction to get completed in the third quarter of 2017.

Headquartered in Columbia, South Carolina, Merritt has 4,500 veterinary clinics across the eastern United States with a strong presence in the southeastern part of the nation. The company offers a comprehensive line of products, including pharmaceuticals, diagnostics and equipment. This leading independent regional veterinary supplier had total sales of approximately $115 million in 2016.

Post the closing of the transaction, Merritt will become part of Henry Schein Animal Health. Per the company, the acquisition will meaningfully strengthen its existing U.S. animal health business. It will also benefit animal health diagnostic, equipment and surgical instruments businesses, including scil, KRUUSE and Veterinary Instrumentation of Henry Schein.

Henry Schein, Inc. Price

Henry Schein, Inc. Price | Henry Schein, Inc. Quote

Notably, Henry Schein's revenue growth in its animal health business has been consistently supported by niche acquisitions. Its robust buyout strategy helps it pursue targets, providing access to additional product lines.

In the beginning of 2017, Henry Schein entered into the Brazilian animal health market with a 51% investment in Tecnew, a privately held distributor of animal health products. Prior to that, the company acquired RxWorks, a leading provider of veterinary practice management software, primarily to customers in Australia, New Zealand, the UK, the Netherlands and other world-wide countries. Like all these businesses, the impending Merritt buyout is set to fortify its global Animal Health operations going forward.

Henry Schein has outperformed the broader industry in a year. The stock has gained 3.5% compared with the broader industry's 3.3% rise.

Zacks Rank & Key Picks

Henry Schein currently carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are IDEXX Laboratories, Inc. IDXX , Lantheus Holdings, Inc. LNTH and Edwards Lifesciences Corporation EW . Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Lantheus Holdings and IDEXX Laboratories carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 2.3% over the last six months.

Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has surged 26.9% over the last six months.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 20.4% over the last six months.

Zacks' 10-Minute Stock-Picking Secret

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.

Learn the secret >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis Report

Edwards Lifesciences Corporation (EW): Free Stock Analysis Report

Lantheus Holdings, Inc. (LNTH): Free Stock Analysis Report

Henry Schein, Inc. (HSIC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

HSIC EW IDXX LNTH

Other Topics

Stocks