Henry Schein to Buy Major Stake in SmartPak - Analyst Blog

Henry Schein, Inc.'s HSIC U.S. Animal Health business – Henry Schein Animal Health – has agreed to acquire roughly 60% ownership stake in SmartPak.

While NY-based Henry Schein is a global distributor of healthcare products and services, MA-based SmartPak is the leading provider of horse supplies and equine supplements across the U.S.

SmartPak reported sales of approximately $105 million in 2013 and expands Henry Schein's product and service offering to the equine community. In 2013, Henry Schein's Global Animal Health business recorded sales of approximately $2.6 billion.

Oak Hill Capital Partners, a leading private equity firm with significant experience in the animal health market, and SmartPak's existing management team will own SmartPak's remaining equity, as part of this transaction. Financial terms of the transaction are expected to close in June, though they have not been disclosed.

Henry Schein expects the transaction to be neutral to its earnings per share for the second half of 2014 and full year 2015, and eventually be accretive to its earnings per share in 2016 by 2 to 3 cents.

Since its launch in 1999, SmartPak has grown to its current team strength of 325. The company offers over 250 branded equine supplements, including SmartSupplements – its own proprietary brand.  

Henry Schein's management is optimistic about owning major shares in a fast growing company like SmartPak and expects to establish a firm foot in the equine market, where SmartPak already holds an enviable position.

SmartPak's management is equally excited about the future prospects of this new partnership, which allows it to join hands with a company that provides the best clinical care products and services for animals. SmartPak deems this pact crucial to realize its vision of expanding access to the unique product offerings of Henry Schein Animal Health.

Both the companies, at present, focuses on supporting animal nutrition and raising awareness regarding the crucial impact of nutrition on overall horse health.

According to the American Horse Council, there exists 9.2 million horses in the U.S. with an estimated 4.6 million Americans involved in the equine industry.

Henry Schein currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the med/dental-supply industry include The Cooper Companies Inc. COO, Steris Corp. STE and Milestone Scientific Inc. (MLSS). All these stocks carry a Zacks Rank #2 (Buy).