Henry Schein Inc. (HSIC - Free Report) recently extended its long-standing relationship with Masimo Corporation (MASI - Free Report) through another distribution agreement. Henry Schein’s animal health business in the U.S. – Butler Schein Animal Health will now distribute Masimo’s innovative portfolio of pulse oximetry technologies.
This appears to be a lucrative deal for Henry Schein as it will expand its product offering for the fast growing animal health market. Revenues from the animal health business recorded robust double-digit growth for the fifth straight quarter in the first quarter of 2013. The inclusion of Masimo’s advanced pulse oximetry technology should accelerate growth for Henry Schein’s animal health franchise.
Henry Schein continues to capture share in the animal health market. Following the deal, Masimo’s innovative portfolio will be made available to Butler Schein’s customer base of over 26,000 veterinary professionals across the U.S. The novel distribution agreement with Masimo should further expand Henry Schein’s market reach.
The distribution agreement applies to Masimo’s upgradable rainbow Radical-7 Pulse CO-Oximeters, Rad-87, Rad-57, Rad-5 and Rad-8, all with SET Measure-Through Motion and Low Perfusion pulse onximetry. The deal between Masimo and Henry Schein intends to leverage the companies’ revenue profile.
At present, Henry Schein is rebranding Butler Schein Animal Health to Henry Schein Animal Health and expects to complete the procedure in the ongoing year. The rebranding of domestic operations coupled with international network in Europe, Australia and Asia is likely to strengthen Henry Schein’s global foothold in the animal health market.
While Henry Schein continues to boost its domestic animal health business, unfavorable macroeconomic factors in the overseas market such as currency headwinds and touch capital spending environment remain an overhang. The stock carries a Zacks Rank #3 (Hold). While we remain on the sidelines for Henry Schein, we are positive that Steris Corp. (STE - Free Report) and CONMED Corporation (CNMD - Free Report) , carrying a Zacks Rank #2 (Buy) will do well.