Zinger Key Points
- KKR to invest $250M in Henry Schein, increasing stake to 12%, with an option to reach 14.9%.
- Henry Schein raises share buyback program by $500M and expects moderate revenue and EPS growth in 2025.
Henry Schein, Inc. HSIC shares are trading higher on Wednesday. The medical and dental supplies distributor disclosed a strategic investment of an additional $250 million from funds affiliated with KKR & Co. Inc. KKR.
With this investment, KKR will become the largest non-index fund shareholder, holding a 12% stake in the company.
The company will also have the option to increase its equity stake up to 14.9% through open market purchases. Henry Schein and KKR will collaborate on a range of value-creation opportunities.
Henry Schein will issue new shares of common stock to funds affiliated with KKR for a $250 million investment based on the market price.
KKR is primarily funding this investment through North America Fund XIII. The completion of the transactions is subject to standard closing conditions.
As part of the arrangement between Henry Schein and KKR, Max Lin and William Daniel will join Henry Schein's Board of Directors as independent directors. Additionally, the Board has appointed Robert Hombach as an independent director.
In addition, Henry Schein’s Board has authorized an increase of $500 million to its share repurchase program, with $250 million to be executed through accelerated share repurchases.
Preliminary Results: Henry Schein sees fourth-quarter preliminary revenue of $3.2 billion (vs. consensus of $3.35 billion), bringing the 2024 revenue to $12.7 billion (vs. street view of $12.8 billion).
The company sees fourth-quarter preliminary adjusted EPS of $1.19 (vs. consensus of $1.23) and 2024 adjusted EPS of $4.74 (vs. consensus of $4.78).
2025 Outlook: Henry Schein expects both revenues and adjusted EPS to grow in the range of low to mid-single digits in 2025.
The company projects adjusted EBITDA to grow in a mid-single-digit range in 2025.
The company plans to release its fourth quarter and full-year 2024 financial results on Tuesday, February 25, 2025.
Investors can gain exposure to HSIC via AdvisorShares Focused Equity ETF CWS and Invesco Bloomberg Analyst Rating Improvers ETF UPGD.
Price Action: HSIC shares are up 6.48% at $81.03 at the last check Wednesday.
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