Health-care products distributor Henry Schein is usually spinning off its animal health business in addition to merging which with Vets First Choice to form a completely new company called Vets First Corp.
The deal, which is usually likely to be announced Monday morning, would likely combine Henry Schein’s veterinary supplies, software for practices in addition to distribution network with Vets First Choice’s prescription management platform.
Henry Schein anticipates receiving coming from the transaction about between $1 billion in addition to $1.25 billion in cash on a tax-free basis. Its shareholders will own about 63 percent of the completely new company, in addition to Vets First Choice shareholders will own about 37 percent of which.
Americans are investing more in their pets, spurring interest coming from companies searching for growth. In February, General Mills said which would likely buy pet food maker Blue Buffalo for $8 billion. M&M-owner Mars has bulked up its pet business, which includes Iams, Pedigree in addition to Whiskas brands. Last year, which acquired animal hospital company VCA for $9.1 billion.
Meanwhile, the threat of Amazon’s entry into health care looms. The company already sells some supplies to doctor in addition to dentist offices through its Amazon Business division. Henry Schein says spinning off in addition to merging the animal health business will allow which to focus more of its attention on the dental in addition to medical supply businesses.
“Following the spin-off of (Henry Schein Animal Health) as an independent company, Henry Schein will focus on our market-leading dental in addition to medical businesses as we make continued investments for future growth,” CEO Stanley Bergman said in a statement.
Henry Schein’s stock has slid nearly 18 percent over the past year.
Its animal health business posted $3.48 billion in revenue last year. Within three years, the deal is usually likely to accelerate revenue growth as the merged company adopts the Vets First Choice platform across the Henry Schein customer base, potentially adding more than $100 million in operating income.
The merger gives eight-year-old Vets First Choice the chance to become public without going through an initial public offering. The Portland, Maine-based company raised $223 million coming from a group of investment firms last year.
Founder in addition to CEO Ben Shaw will become CEO of the completely new company. Henry Schein will nominate six board members in addition to Vets First Choice will nominate 5. Bergman will serve on the board while continuing to serve as Henry Schein’s CEO.
“By combining forces with (Henry Schein Animal Health), we anticipate accelerating the introduction of completely new in addition to enhanced programs, services, in addition to technology to veterinary teams so they can deepen their focus on doing the great work of caring for the animals in our lives,” Shaw said in a statement.
The deal is usually likely to close by the end of the year.