Henry Schein (HSIC) has decided to acquire Australia based Provet Holdings for approximately $91 million. Provet is the largest veterinary products distributor in Australia having $278 million in revenues for the fiscal year ended in June 2010. While the deal is expected to be neutral to 2011 EPS, it is expected to have a positive impact of 2-3 cents in 2012. The transaction is expected to close by the year-end. Subsequent to the acquisition of Provet, Henry Schein will be able to target the Australasian veterinary market which is valued at AUD$620 million. However, the company has a strong presence in the dental market of this region. Henry Schein derives its revenues from two segments – Healthcare distribution and Technology. Through the former segment, the company caters to dental, medical, animal health and international market. These five divisions accounted for 37%, 15%, 13%, 32% and 3% respectively of total revenues during the last quarter. The portfolio consists of consumable products, small equipment, laboratory products, large dental and medical equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins.
Revenues derived from animal health witnessed a whopping 269.7% annual rise to $234.7 million, primarily attributable to the integration of the Butler Schein Animal Health business into the segment. The recent acquisition of Provet should further strengthen the animal health segment of Henry Schein. The company expects to generate about $2 billion in revenues from this segment.
Henry Schein continues to drive strong top-line growth and has established its footprint in both domestic and international market in dental, vet, and medical supply distribution. The company’s performance should improve further with the gradual recovery in economic outlook.
HENRY SCHEIN IN (HSIC): Free Stock Analysis Report
Zacks Investment Research
