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Henry Schein (HSIC) Buys ABASE, Expands in Animal Health

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Henry Schein, Inc. (HSIC - Free Report) recently announced the purchase of a 60% stake in veterinary product distributor — ABASE — under certain undisclosed financial terms. Per the company, the deal will drive earnings after 2018.

Notably, Sao Paulo, Brazil-based ABASE is a family-owned distributor of veterinary health care products.

At the beginning of 2017, Henry Schein had entered the Brazilian animal health market with a 51% investment in Tecnew, a privately-held distributor of animal health products. Through the latest acquisition, the company expects to boost its business in Brazil and diversify relationship with global suppliers.

Recent Developments in Animal Health

Henry Schein has been consistently trying to expand its Global Animal Health business. The segment witnessed 11.7% rise in revenues in the last reported third quarter. In October 2017, the company completed the buyout of Merritt Veterinary Supplies. With this, Merritt became part of the veterinary business of Henry Schein. The company offers a comprehensive line of products, including pharmaceuticals, diagnostics and equipment along with 4,500 veterinary clinics across the eastern United States, with a strong presence in the southeastern part of the nation.

Henry Schein’s Animal Health also opened a new National Distribution Service Center in Columbus' Brookhollow neighborhood, expanding its presence in central Ohio.

Market Potential

According to a report by Grand View Research, the global animal health market is expected to reach a value of $58.4 billion by 2025. Considering the huge potential of the market, we believe the latest development is strategic.

Share Price Movement

Over the past three months, Henry Schein has been underperforming the broader industry. The stock has lost 8.6% in contrast to the industry’s gain of 14.7%. We believe this latest development will help boost investors’ confidence on the stock and reverse the downtrend.

 

 

Zacks Rank & Key Picks

Henry Schein carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are Amedisys, Inc. (AMED - Free Report) , Bio-Rad Laboratories, Inc. (BIO - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Bio-Rad Laboratories flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 25%.

Amedisys has a long-term expected earnings growth rate of 18.5%. The stock carries a Zacks Rank #2 (Buy).

Intuitive Surgical has a long-term expected earnings growth rate of 9.2%. The stock carries a Zacks Rank #2.

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