Patterson Companies Expands Strategic Direction for Veterinary Business
Patterson Companies Expands Strategic Direction for Veterinary Business
Acquires National Veterinary Services, Largest Veterinary Distributor in United Kingdom
ST. PAUL, Minn.--(BUSINESS WIRE)-- Patterson Companies, Inc. (Nasdaq: PDCO) today announced another step in the company's strategic vision for its veterinary business. Patterson Companies has agreed to acquire the stock of National Veterinary Services Limited (NVS), a wholly owned subsidiary of Dechra Pharmaceuticals PLC (Dechra) (DPH.L). NVS is the largest veterinary distributor in the United Kingdom providing an array of products and services, including reference laboratory offerings.
Patterson is focused on building its value-added model in the veterinary market by increasing the company's service offerings, as well as its equipment and technical service strategy, to capture market share as veterinarians expand their practice capabilities to meet heightened pet owner expectations. In line with this overall strategy, the company believes NVS provides an exceptional platform to extend Patterson's strategies into additional geographic markets.
The Patterson Companies and the Dechra Boards of Directors have unanimously approved a definitive agreement, under which Patterson Companies will acquire all of the outstanding shares of NVS for £87.5 million (approximately US $135 million) in cash. The transaction is subject to approval by Dechra shareholders with a closing date currently scheduled in August 2013. NVS had revenues of more than £315 million for its year ended June 30, 2013. In Patterson's first full year after closing, the acquisition is expected to be accretive to earnings by $0.04 to $0.05 per share, including the impact of one-time and transactional expenses.
"This agreement reflects our commitment to Patterson Veterinary's strategic direction. Through this acquisition, we are able to expand Patterson Veterinary internationally, providing our industry-leading service to a new market," said Scott P. Anderson, chairman and chief executive officer of Patterson Companies. "Over the past several years, we have seen the strength of Patterson's platform and global network continue to grow. With this acquisition, we will further extend our footprint and increase shareholder value."
George Henriques, president of Patterson Veterinary, commented, "We are excited to have NVS and the Labs Business join the Patterson group , and are enthused by this unique opportunity to create a powerful global franchise with best-in-class client service in the veterinary market. We see strong growth opportunities as consumers continue to increase the amount they spend on their pets. There are numerous benefits to this transaction, including NVS's long-standing relationships in the U.K. and other markets, their cutting edge customer-facing technology, operational efficiencies and strong operating cash flows."
NVS will operate as a stand-alone subsidiary of Patterson Companies with Martin Riley serving as managing director. Riley has been managing director of NVS for eight years and has outstanding credentials in the industry. He and the staff at NVS will report administratively to Henriques with limited integration of systems in the near-term, as Patterson continues its previously announced internal systems transformation.
"We look forward to bringing new innovative and exciting benefits to our customers, adding to our technology platform and expertise to give us market-leading competitive advantage," said Riley. "The Patterson brand will enhance our already solid reputation and bring new opportunities to our business."
About Patterson Companies, Inc.:
Patterson Companies, Inc. is a value-added distributor serving the dental, companion-pet veterinarian and rehabilitation supply markets.
As Patterson's largest business, Patterson Dental provides a virtually complete range of consumable dental products, equipment and software, turnkey digital solutions and value-added services to dentists and dental laboratories throughout North America.
Patterson Veterinary is a leading distributor of consumable veterinary supplies, equipment and software, diagnostic products, vaccines and pharmaceuticals to companion-pet veterinary clinics.
Patterson Medical is the world's leading distributor of rehabilitation supplies and non-wheelchair assistive patient products to the physical and occupational therapy markets. The unit's global customer base includes hospitals, long-term care facilities, clinics and dealers.
About Dechra Pharmaceuticals PLC:
Dechra is an international veterinary pharmaceutical business. Its expertise is in the development, manufacturing, distribution, sales and marketing of high quality products exclusively for veterinarians worldwide. Dechra's business is unique as the majority of its products are used to treat medical conditions for which there is no other effective solution or have a clinical or dosing advantage over competitor products.
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the Company's ability to control. The Company cautions shareholders and prospective investors that the following factors, among others, may cause actual results to differ materially from those indicated by the forward-looking statements: competition within the dental, veterinary, and rehabilitative and assistive living supply industries; changes in the economics of dentistry, including reduced growth in expenditures by private dental insurance plans, the effects of economic conditions and the effects of healthcare reform, which may affect future per capita expenditures for dental services and the ability and willingness of dentists to invest in high-technology products; the effects of healthcare related legislation and regulation which may affect expenditures or reimbursements for rehabilitative and assistive products; changes in the economics of the veterinary supply market, including reduced growth in per capita expenditures for veterinary services and reduced growth in the number of households owning pets; the ability of the Company to maintain satisfactory relationships with its sales force; unexpected loss of key senior management personnel; unforeseen operating risks; risks associated with the dependence on manufacturers of the Company's products; and the ability of the Company to successfully integrate the recent acquisitions into its existing business. Forward-looking statements are qualified in their entirety by the cautionary language set forth in the Company's filings with the Securities and Exchange Commission.
Patterson Companies, Inc.
Ann B. Gugino, 651-686-1600
Vice President, Planning & Strategy
R. Stephen Armstrong, 651-686-1600
Executive Vice President & CFO
KEYWORDS: United States North America Minnesota
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