Henry Schein Completes Acquisition of Majority Interest of TriMed, Inc.

Rhea-AI Summary

Henry Schein, Inc. expands into the high-growth extremities market with the acquisition of TriMed, Inc., a global developer of orthopedic solutions. The acquisition strengthens Henry Schein's relationships with Integrated Delivery Networks and Ambulatory Surgery Centers, providing a wider range of surgical solutions. TriMed had 2023 net sales of approximately $52 million, and the transaction is expected to be neutral to 2024 non-GAAP earnings per share for Henry Schein.

Insights

Market Research Analyst

The acquisition of TriMed by Henry Schein, Inc. represents a strategic move into the high-growth extremities market, which includes products for orthopedic treatments of the foot, ankle, hand and wrist. From a market research perspective, this expansion taps into a burgeoning sector, driven by an aging population and a rise in sports-related injuries that demand specialized orthopedic solutions.

Examining the financial aspect, TriMed's net sales of approximately $52 million in 2023 suggest a moderate but significant addition to Henry Schein's revenue streams. The expected neutrality of the transaction to 2024 non-GAAP earnings per share indicates a cautious short-term financial approach, with accretion anticipated in the longer term. This suggests a strategic investment that is not aimed at immediate earnings boost but rather at strengthening market position and future growth.

Financial Analyst

From a financial analysis standpoint, the non-disclosure of the acquisition terms calls for a closer look at Henry Schein's capital allocation strategy. Investors should monitor the company's subsequent financial statements for the impact of this transaction on its balance sheet, cash flows and earnings. The projected accretive nature post-2024 is a positive signal for long-term shareholder value, assuming integration synergies are realized and the expanded product portfolio drives new sales opportunities.

It is also essential to consider the competitive landscape. By acquiring TriMed, Henry Schein not only gains innovative products but also TriMed’s established relationships with Integrated Delivery Networks and Ambulatory Surgery Centers. This could enhance Henry Schein's competitive edge in the orthopedic space and potentially increase its bargaining power with suppliers and customers.

Medical Device Industry Expert

The orthopedic device market is highly specialized and requires significant expertise in product development and commercialization. The continued involvement of TriMed's founders, who have extensive experience in the extremities market, is a strategic advantage for Henry Schein. Their expertise in product development and established commercial relationships can facilitate smoother integration and accelerate the growth of Henry Schein's orthopedic segment.

Furthermore, the focus on expanding the sale of Henry Schein-owned brands through the acquisition aligns with industry trends where companies are looking to offer comprehensive solutions. This end-to-end service model is increasingly preferred by healthcare providers seeking to streamline their operations and improve patient outcomes.

Company Expands into High-Growth Extremities Market with Strategic Acquisition

MELVILLE, N.Y.--(BUSINESS WIRE)-- Henry Schein, Inc. (NASDAQ: HSIC), the world’s largest provider of health care solutions to office-based dental and medical practitioners, today announced it has completed the acquisition of TriMed, Inc., a global developer of solutions for the orthopedic treatment of lower extremities (foot and ankle) and upper extremities (primarily hand and wrist).

Henry Schein announced the agreement to acquire a majority interest of TriMed on December 20, 2023. The addition of TriMed will strengthen Henry Schein’s deep and longstanding relationship with existing Integrated Delivery Networks (IDNs) and Ambulatory Surgery Center (ASC) customers by providing a wider range of surgical solutions. This reflects the Company’s strategy to expand the sale of Henry Schein-owned brands to new and existing customers.

Headquartered in Santa Clarita, CA, TriMed had 2023 net sales of approximately $52 million. Henry Schein expects the transaction to be neutral to 2024 non-GAAP earnings per share and accretive thereafter. Financial terms were not disclosed.

“With this new partnership, Henry Schein is reinforcing our commitment to meeting the evolving needs of our customers in the orthopedic market and providing health care professionals with the tools needed to deliver outstanding care to patients,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer, Henry Schein, Inc. “By leveraging TriMed's established presence and reputation, together we will expand our product offering and provide comprehensive orthopedic solutions to our customers. We welcome our new TriMed colleagues to Team Schein, and we look forward to continued success together.”

TriMed founders David Medoff, Chief Commercial Officer, and Robert Medoff, MD, Medical Advisor, will continue to be a part of the management team of TriMed and bring to Henry Schein extensive experience in the extremities market, primarily in product development and commercial relationships.

About Henry Schein, Inc.

Henry Schein, Inc. (Nasdaq: HSIC) is a solutions company for health care professionals powered by a network of people and technology. With more than 25,000 Team Schein Members worldwide, the Company's network of trusted advisors provides more than 1 million customers globally with more than 300 valued solutions that help improve operational success and clinical outcomes. Our Business, Clinical, Technology, and Supply Chain solutions help office-based dental and medical practitioners work more efficiently so they can provide quality care more effectively. These solutions also support dental laboratories, government and institutional health care clinics, as well as other alternate care sites.

Henry Schein operates through a centralized and automated distribution network, with a selection of more than 300,000 branded products and Henry Schein private-brand products in stock.

A FORTUNE 500 Company and a member of the S&P 500® index, Henry Schein is headquartered in Melville, N.Y., and has operations or affiliates in 33 countries and territories. The Company's sales reached $12.3 billion in 2023, and have grown at a compound annual rate of approximately 11.5 percent since Henry Schein became a public company in 1995.

For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein, Instagram.com/HenrySchein, and @HenrySchein on X.

Cautionary Note Regarding Forward-Looking Statements

In accordance with the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein. All forward-looking statements made by us are subject to risks and uncertainties and are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements include EPS guidance and are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. A fuller discussion of our operations, financial condition and status of litigation matters, including factors that may affect our business and future prospects, is contained in documents we have filed with the United States Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K, and will be contained in all subsequent periodic filings we make with the SEC. These documents identify in detail important risk factors that could cause our actual performance to differ materially from current expectations. Forward looking statements include the overall impact of the Novel Coronavirus Disease 2019 (COVID-19) on the Company, its results of operations, liquidity and financial condition (including any estimates of the impact on these items), the rate and consistency with which dental and other practices resume or maintain normal operations in the United States and internationally, expectations regarding personal protective equipment (“PPE”) and COVID-19 related product sales and inventory levels, whether additional resurgences or variants of the virus will adversely impact the resumption of normal operations, whether supply chain disruptions will adversely impact our business, the impact of integration and restructuring programs as well as of any future acquisitions, general economic conditions including exchange rates, inflation and recession, and more generally current expectations regarding performance in current and future periods. Forward looking statements also include the (i) ability of the Company to have continued access to a variety of COVID-19 test types, expectations regarding COVID-19 test sales, demand and inventory levels, as well as the efficacy or relative efficacy of the test results given that the test efficacy has not been, or will not have been, independently verified under normal FDA procedures, and (ii) potential for the Company to distribute the COVID-19 vaccines and ancillary supplies.

Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: risks associated with COVID-19 and any variants thereof, as well as other disease outbreaks, epidemics, pandemics, or similar wide-spread public health concerns and other natural disasters; our dependence on third parties for the manufacture and supply of our products; our ability to develop or acquire and maintain and protect new products (particularly technology products) and technologies that achieve market acceptance with acceptable margins; transitional challenges associated with acquisitions, dispositions and joint ventures, including the failure to achieve anticipated synergies/benefits; financial and tax risks associated with acquisitions, dispositions and joint ventures; certain provisions in our governing documents that may discourage third-party acquisitions of us; effects of a highly competitive (including, without limitation, competition from third-party online commerce sites) and consolidating market; the repeal or judicial prohibition on implementation of the Affordable Care Act; changes in the health care industry; risks from expansion of customer purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service issues with our third-party shippers; general global and domestic macroeconomic and political conditions, including inflation, deflation, recession, fluctuations in energy pricing and the value of the U.S. dollar as compared to foreign currencies and changes to other economic indicators, international trade agreements, potential trade barriers and terrorism; failure to comply with existing and future regulatory requirements; risks associated with the EU Medical Device Regulation; failure to comply with laws and regulations relating to health care fraud or other laws and regulations; failure to comply with laws and regulations relating to the collection, storage and processing of sensitive personal information or standards in electronic health records or transmissions; changes in tax legislation; risks related to product liability, intellectual property and other claims; litigation risks; new or unanticipated litigation developments and the status of litigation matters; risks associated with customs policies or legislative import restrictions; cyberattacks or other privacy or data security breaches; risks associated with our global operations; our dependence on our senior management, employee hiring and retention, and our relationships with customers, suppliers and manufacturers; and disruptions in financial markets. The order in which these factors appear should not be construed to indicate their relative importance or priority.

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control or predict. Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actual results. We undertake no duty and have no obligation to update forward-looking statements except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240402284172/en/

Investors:

Ronald N. South

Senior Vice President and Chief Financial Officer

ronald.south@henryschein.com

(631) 845-2802

Graham Stanley

Vice President, Investor Relations and Strategic Financial Project Officer

graham.stanley@henryschein.com

(631) 843-5963

Media:

Ann Marie Gothard

Vice President, Global Corporate Media Relations

annmarie.gothard@henryschein.com

(631) 390-8169

Source: Henry Schein, Inc.

FAQ

What market is Henry Schein expanding into with the acquisition of TriMed?

Henry Schein is expanding into the high-growth extremities market with the acquisition of TriMed, a global developer of orthopedic solutions.

What type of customers will benefit from the acquisition of TriMed?

Existing Integrated Delivery Networks and Ambulatory Surgery Center customers will benefit from a wider range of surgical solutions provided by the acquisition of TriMed.

What were TriMed's net sales in 2023?

TriMed had 2023 net sales of approximately $52 million.

How will the acquisition of TriMed impact Henry Schein's earnings?

The transaction is expected to be neutral to 2024 non-GAAP earnings per share for Henry Schein.

Who are the founders of TriMed and what roles will they play post-acquisition?

The founders of TriMed are David Medoff, Chief Commercial Officer, and Robert Medoff, MD, Medical Advisor. They will continue to be part of the management team of TriMed.