KKR to acquire 12% stake in Henry Schein

MELVILLE, N.Y. - Global investment firm KKR is set to become a significant shareholder in Henry Schein (NASDAQ:HSIC), Inc., the world’s largest provider of health care solutions to office-based dental and medical practitioners. With a new strategic investment of $250 million, KKR will hold a 12% stake in the company, becoming the largest non-index fund shareholder. According to InvestingPro data, Henry Schein boasts a market capitalization of $9.49 billion and generates annual revenue of $12.5 billion, establishing itself as a prominent player in the Healthcare Providers & Services industry.

The investment aligns with Henry Schein’s BOLD+ strategy, aimed at driving growth and value creation. Additionally, KKR will have the option to increase its total equity stake to 14.9% through open market purchases. InvestingPro analysis suggests the stock currently trades above its Fair Value, with a notably stable profile reflected in its low beta of 0.89 and generally low price volatility.

As part of the collaboration, two KKR representatives with deep health care sector experience will join the Henry Schein Board as independent directors. Max Lin, a KKR partner, will participate in the Board’s Nominating and Governance Committee and Strategic Advisory Committee. William K. Daniel, an executive advisor to KKR, will join the Board’s Compensation and Strategic Advisory Committees.

In a separate move, Robert J. Hombach, with a background in financial and strategic experience in health care, has also been appointed as an independent director to the Henry Schein Board.

Henry Schein reported preliminary unaudited financial results for the fourth quarter of 2024, with a GAAP diluted EPS of $0.74 and a non-GAAP diluted EPS of $1.19. Looking ahead, the company provided preliminary financial guidance for 2025, expecting low to mid-single digit growth in non-GAAP EPS. InvestingPro reveals the company maintains a strong financial health score of GOOD, with management actively buying back shares. Subscribers can access 6 additional ProTips and a comprehensive Pro Research Report for deeper insights into Henry Schein’s financial outlook.

The company also announced an increase in its share repurchase program authorization by $500 million, signaling confidence in its financial health and future prospects. This move aligns with the company’s track record of generating solid returns, maintaining a healthy current ratio of 1.42 and delivering positive earnings with a P/E ratio of 31.03.

The consummation of the investment is subject to customary closing conditions, including regulatory approvals. The full agreement between Henry Schein and KKR will be filed with the Securities and Exchange Commission.

This news is based on a press release statement from Henry Schein, Inc.

In other recent news, Henry Schein experienced a modest increase in Q3 2024 global sales, reporting a 0.4% year-over-year rise to $3.2 billion. However, the company’s GAAP net income for the same period decreased from $137 million in Q3 2023 to $99 million. Non-GAAP net income also saw a decline, dropping from $173 million the previous year to $155 million. Amid these developments, activist investor, Ananym Capital Management, has proposed significant changes within the company, including nominating up to six directors to the board and advocating for cost reductions and enhanced capital allocation. In response, Mizuho (NYSE:MFG) has set a neutral rating for Henry Schein with a target of $75, while Piper Sandler has reaffirmed its Overweight rating. These are recent developments, and the company’s future actions regarding these proposals remain to be seen.

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