Patterson Companies, a key player in the dental and animal health equipment distribution sector, is set to be acquired by the health care investment firm Patient Square Capital in a significant transaction valued at $4.1 billion. This deal also includes the refinancing of Patterson's receivables facilities, which is expected to bolster its financial health moving forward. Under the terms of the transaction, shareholders of Patterson will receive $31.35 per share in cash, reflecting a notable premium of approximately 49% over the company's 30-day average price leading up to the announcement on December 4, the last trading day prior to the strategic alternatives evaluation.
Following the announcement, Patterson's stock witnessed a robust surge of 35% in trading on Wednesday, signaling investor confidence in the deal. Commenting on this pivotal moment in the company’s journey, Patterson's Chief Executive Officer Don Zurbay stated, "Today's announcement 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." The acquisition is contingent upon regulatory approval and shareholder consent, with completion projected for the fourth quarter of Patterson's fiscal 2025.
The transaction includes a "go-shop" period, providing Patterson the opportunity to seek alternative acquisition proposals in a competitive environment. To facilitate this transaction, Patterson plans to leverage committed equity from Patient Square Equity Partners alongside debt financing. Upon completion of the deal, Patterson will transition away from public trading, allowing for a more focused strategic direction. In its recent performance report, Patterson posted adjusted earnings of $0.47 per share for the fiscal second quarter, a slight decline from $0.50 per share during the same period last year.
However, the company saw a year-over-year sales increase of 1.3% to reach $1.67 billion. Looking ahead, Patterson anticipates adjusted earnings per share to fall within the range of $2.25 to $2.35. Emphasizing the collaborative future ahead, Jim Momtazee, managing partner at Patient Square Capital, expressed: "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.".