A Medical Device Daily
Henry Schein (Melville, New York) yesterday reported that it would acquire the assets of Island Dental, Darby Medical Supply and Darby Dental Laboratory Supply from Darby Group Companies (Jericho, New York) for about $51.5 million in cash.
“The acquisition of these three businesses is an excellent match with Henry Schein's U.S. operations, and affords deeper penetration in our Dental and Medical divisions,” said Stanley Bergman, CEO and chairman of Henry Schein. “Furthermore, Island Dental, Darby Medical Supply and Darby Dental Laboratory Supply share with Henry Schein a customer-focused culture, with a commitment to personalized service and attention to detail . . . We look forward to offering new products, services and programs to our new customers and sales representatives.”
The company said it expects acquisition of the three Darby units to close during 3Q06 and anticipates that, with integration, it will realize operational efficiencies from the acquisition.
Together, the three businesses had 2005 sales of about $219 million. Henry Schein projected the acquisition to be slightly accretive to 2006 diluted EPS, and to add 1 to 3 cents to diluted EPS in 2007.
Island Dental is a distributor of dental merchandise and equipment with a nationwide presence, with particular strength in the Northeast, Southeast and Western U.S. The company provides its customers with a selection of more than 45,000 products. The Island Dental business will be integrated into Henry Schein's Sullivan-Schein Dental division.
Darby Medical Supply provides medical supplies and pharmaceutical products, including generic drugs, branded drugs and vaccines to small medical practices, primarily through telesales and direct marketing. Darby Medical Supply will become part of Henry Schein's Medical Group.
Darby Dental Laboratory Supply is a distributor serving the dental lab community, primarily through direct marketing, with more than 25,000 products. The company, in business for more than 50 years, saying that it “enjoys several product exclusives.” Darby Dental Laboratory Supply will be integrated into Henry Schein's Zahn Dental Laboratory division.
Henry Schein bills itself as the largest provider of healthcare products and services to office-based practitioners in the combined North American and European markets, serving more than 500,000 customers. The company operates through a centralized and automated distribution network, supplying more than 200 countries with more than 70,000 national and Henry Schein private-brand products, and more than 100,000 special order items.
Henry Schein reported record sales of $4.6 billion in 2005.
Sirona Dental Systems (Island City, New York), a manufacturer of high-tech dental equipment, reported the closing of its merger with Schick Technologies (Long Island, New York), a developer of digital radiographic imaging systems and devices for the dental industry.
Effective yesterday, the stock of the combined company – now named Sirona Dental Systems and with primary headquartered in Bensheim, Germany – began trading on the Nasdaq under new symbol SIRO.
The deal, a reverse merger transaction valued at $1.46 Billion first unveiled last September (Medical Device Daily, Sept. 27, 2005), was billed by the two firms as creating “a global player in dental technology, with strong product lines in all of the major dental segments.”
The merged company describes itself as having “a strong global presence and breadth of products based on complementary technologies, geographic coverage and channel strengths.” Schick claims a leading position in digital intra-oral imaging systems in North America, while Sirona is a leading supplier of CAD/CAM restoration equipment, panoramic and intra-oral imaging systems, treatment centers and instruments worldwide.
Jost Fischer, president, CEO and chairman of the combined firm, said, “We believe that, as a result of our combined strengths, Sirona will be best positioned in the industry to leverage opportunities into further and sustained growth. The merger with Schick supports our strategy of maintaining our leadership position in high-tech dental equipment.”
The company will have more than 1,900 employees on five continents. Sirona's revenues for FY05 were $464 million. Schick's revenues for its last fiscal year ended March 31 were $70 million. Sirona Dental Systemssaid it expects to achieve annual synergies of $5 million to $7 million within 12 to 24 months. The business combination is expected to be accretive to Schick's 2006 earnings per share.
In other dealmaking activity:
• Siemens Medical Solutions USA (Malvern, Pennsylvania) and Diagnostic Products (DPC; Los Angeles) reported expiration of the Hart-Scott-Rodino waiting period for their merger agreement.
The deal, valued at about $1.86 billion, was first announced in April (MDD, April 28, 2006), with Siemens bannering it as a move to enter the “personalized” medicine space via DPC's technologies: automated body fluid analyzers and tests.
As reported, the boards of the two companies have approved the agreement. DPC shareholders will vote on the deal, which is subject to other customary closing conditions, at a special meeting July 27.
DPC, founded in 1971, develops in vitro diagnostics, including the Immulite series of immunoassays, and an expanding menu of specific allergens and allergy panels. DPC also designs and manufactures automated laboratory instrumentation and automation solutions and a combined chemistry and immunoassay menu.
• The way is now clear for the Bayer Group (Leverkusen, Germany) to acquire Schering (Berlin) as it has reported gaining control of a total of about 88% of Schering's 191 million issued and outstanding shares. The attainment of a three-quarters majority was the last remaining condition of the takeover offer. Both the European Commission and U.S. antitrust authorities had already given their unconditional approval.
By the expiration of the acceptance period on June 14, 87.3 million Schering shares had been tendered to Bayer under the takeover offer, equivalent to 45.7% of the issued and outstanding Schering shares. In addition, by the same date, Bayer acquired 77.8 million Schering shares, or 40.7% of the issued and outstanding Schering shares. The minimum acceptance threshold of 75% was therefore exceeded.
Another 2.9 million Schering shares, or 1.5%, were purchased by the Bayer Group thereafter.
The remaining Schering stockholders have the opportunity to accept the offer of EUR 89 per share during the additional acceptance period, running from June 23 until July 6. Bayer said it continues to pursue its goal of wholly acquiring Schering.