US-based Patterson Companies will be sold to a health-focused private equity firm for $4.1bn. Healthcare investment firm Patient Square Capital agreed to acquire the company.
Under the terms of the agreement, Patterson shareholders will receive $31.35 in cash per share, representing an approximately 49% premium to Patterson’s 30 calendar-day volume-weighted average price (VWAP) ending 4 Dec 2024, the last trading day before Patterson announcing the evaluation of strategic alternatives.
The company had announced it is exploring strategic options, including a sale or merger, to boost shareholder value, after it recently announced its Q2 earnings dropped by one-third year over year (YOY).
“[This] marks an exciting next step in Patterson’s evolution and delivers immediate and certain value for our shareholders and positions us to continue to invest in serving our customers and driving growth,” said Patterson CEO and president Don Zurbay.
“This transaction follows a review of strategic alternatives by our board of directors, with assistance from our independent advisors, maximising our value and enabling Patterson to continue to execute our strategy well into the future.” Earnings were mixed, “given the challenging end market environment”, he added.
Patient Square managing partner Jim Momtazee said, “Patient Square is excited to work closely with management on the next chapter of growth for the business building on its long and proud legacy.”
Patterson’s board of directors, excluding Zurbay given his position as a management director, has unanimously approved the transaction. Consistent with the Patterson Companies’ commitment to strong governance practices, Zurbay has recused himself from participating in any deliberations or approvals related to the transaction, according to the press release.
The transaction will be financed through a combination of committed equity financing. The transaction is expected to close in Q4 of Patterson’s fiscal 2025, subject to the receipt of shareholder approval, regulatory approvals, and the satisfaction of other customary closing conditions.
Upon completion of the transaction, Patterson will become a privately held company, and its common stock will no longer be traded on the NASDAQ. Patterson will maintain its HQ in St Paul, Minnesota.
Patterson Companies connects dental and animal health customers in North America and the UK to its products, technologies, services and business solutions. Patient Square Capital, meanwhile, is a health care investment firm with approximately $11bn in assets under management as of 30 Sep 2024. The firm aims to achieve strong investment returns by partnering with growth-oriented companies and management teams whose products, services, and technologies improve health.
Source: Dental Products Report
