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Henry Schein to spin off, merge veterinary business with Vets First Choice
Merger will create independent public company called Vets First Corp.; Henry Schein expects to receive up to $1.25 billion in cash in deal.
Henry Schein Inc. and Vets First Choice announced plans April 23 for Henry Schein to spin off its animal health business and merge it with Vets First Choice, according to a media release from Henry Schein. Henry Schein is the top distributor of animal health products and a provider of practice management software for veterinary practices, and Vets First Choice is an online veterinary pharmacy and tech-services platform. Both are publicly traded.
The new company, to be called Vets First Corp., will combine data analytics, digital communications, practice management software and supply-chain expertise into a multichannel platform, the release states. After spinning off its animal health division, Henry Schein plans to focus on its medical and dental businesses.
Ben Shaw, founder and CEO of Vets First Choice, will become CEO of the new company, which will be headquartered in Portland, Maine, current home of Vets First Choice.
“We are early in the lifecycle of rapid technological change in the animal health market,” Shaw says in the release. “This merger creates an enhanced value chain that connects the veterinarian, the manufacturer and the pet owner through insights and analytics that will support better clinical and financial outcomes.”
Henry Schein Animal Health (HSAH) employs approximately 4,300 people, and its active customers include about three-fourths of U.S. veterinarians, the release reports. In addition, more than half of U.S. veterinary practices use Henry Schein's practice management software. Vets First Choice employs about 750 people in the U.S., and more than 5,100 veterinary practices use its prescription management platform.
Immediately after the spinoff, HSAH will combine with Vets First Choice to form a new publicly traded company, and the new company will have combined 2017 sales of approximately $3.6 billion, the release states. The new board of directors will be made up of current members from the boards of the separate companies. David Shaw, chairman of the board of Vets First Choice, as well as founder of IDEXX Laboratories and Ben Shaw's father, will serve as chairman of Vets First Corp.
Organizers of the merger expect that Henry Schein shareholders will own 63 percent of Vets First Corp. common stock after the transaction, while Vets First Choice shareholders will own 37 percent. In addition, Henry Schein expects to receive up to $1.25 billion in cash on a tax-free basis as part of the deal. The transaction has been unanimously approved by the boards of both companies and is expected to close by the end of 2018.