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Henry Schein, Inc. (HSIC - Analyst Report), a leading healthcare products and services distributor, has been on an acquisition spree over the recent past. The company has successfully maintained this trend with the completion of the acquisition of Ireland-based animal health product distributor C&M Vetlink. This latest buy coincides with Henry Schein’s advanced strategic plan to expand its international footprint by growing across new geographies, thereby retaining its position as a major Pan-European distributor of animal health products and services. Financial terms of the deal were not revealed.

At present, C&M Vetlink, one of the leading distributors of veterinary and companion animal health products across Ireland, has revenue of approximately €42 million or $54.7 million a year. C&M Vetlink, with around 70% of sales from large animals, reveals the importance of dairy farming and livestock in the Irish economy. 

Henry Schein remains optimistic about the prospects of this acquisition and expects this to further strengthen the company’s fastest growing animal health business (sales of $2 billion a year). This venture has enabled Henry Schein to foray into Ireland, an entirely new market for the company with substantial market shares. The company expects the acquisition to be neutral to slightly accretive to its fiscal 2013 financial performance.

Henry Schein is focusing on expansion through acquisitions both in animal health and dental market, based on its solid cash balance ($89.3 million at the end of third quarter 2012). Earlier in October, the company bought a majority stake in a Canada-based privately-held dental software company, The Exan Group. Prior to that, in May, the company entered into the Dutch market by acquiring AUV Veterinary Services, the veterinary products distribution arm of the Netherlands-based AUV Group.

The other recent acquisitions include a global distribution agreement with Israeli dental technology company ReDent Nova, a deal with non-invasive monitoring technology for patient care provider Masimo Corporation (MASI - Analyst Report) to distribute Masimo’s Pronto-7 and three successive acquisitions namely Ortho Technology, Modern Laboratory Services and Accord.

Henry Schein continues to experience strong top-line growth and has established a strong foothold in both the domestic and international markets in dental, veterinary and medical supply distribution. We are also encouraged by the company’s focus on improving its cost structure to drive profitability.

Henry Schein’s performance should improve further with the gradual recovery in the economic outlook. However, the company faces stiff competition from the likes of McKesson Corporation (MCK - Analyst Report) and Patterson Companies Inc. (PDCO - Analyst Report). The stock retains a short-term Zacks #3 Rank (Hold). Over the long term we have a Neutral recommendation on the stock.

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