Full Press Release Details
HENRY SCHEIN ANNOUNCES STRATEGIC INVESTMENT BY KKR, BOARD CHANGES AND PROVIDES PRELIMINARY UNAUDITED FINANCIAL RESULTS AND 2025 FINANCIAL
MELVILLE, N.Y. January 29, 2025 Henry Schein, Inc. (Nasdaq: HSIC) ( Henry
Schein or the Company ), the world s largest provider of health care solutions to office-based dental and medical practitioners, today announced a strategic investment by funds affiliated with KKR, a leading global investment
In addition to KKR s current holdings, KKR will make an additional $250 million investment in the Company s common
stock (the Investment ). As a result, KKR will become the largest non-index fund shareholder in the Company with a 12% position, demonstrating the firm s confidence in Henry Schein, its
management team, and its BOLD+1 strategy. KKR will also have the ability to purchase additional shares via open market purchases up to a total equity stake of 14.9% of the outstanding common shares of the Company.
In addition, under the agreement between Henry Schein and KKR, Max Lin and William K. Dan Daniel will join Henry Schein s
Board of Directors (the Board ) as independent directors.
Mr. Lin is a partner at KKR where he leads the Health Care
industry team within its Americas Private Equity platform. He will join the Board s Nominating and Governance Committee as Vice Chair to participate in governance matters, including the ongoing consideration of Board composition and the
Board s ongoing CEO succession planning process. Mr. Lin will also join the Strategic Advisory Committee, which oversees the Company s strategic planning activities.
Mr. Daniel, an executive advisor to KKR and former Executive Vice President at Danaher
Corporation, will join the Board s Compensation and Strategic Advisory Committees.
Separately, the Board has appointed Robert J.
Bob Hombach as an independent director. Mr. Hombach, former Executive Vice President, Chief Financial Officer and Chief Operations Officer of Baxalta Inc. and prior to this, Corporate Vice President and Chief Financial Officer of
Baxter International Inc., is expected to join the Board s Strategic Advisory Committee.
These highly experienced executives will
add to the Company s significant and complementary expertise across finance, operations, and in dental and other areas of health care. With these appointments, the Board will temporarily increase to 16 directors before reducing to 14 directors
effective immediately following the Company s 2025 Annual Meeting and expects to further reduce the size of the Board over time.
Together, Henry Schein and KKR will collaborate to pursue additional opportunities to create shareholder value and drive the business in its
next phase of growth, with a specific focus on strategic growth, operational excellence, capital allocation, and employee engagement, including exploring broad-based equity ownership.
Our Board and management have great respect for KKR, including its partnership-oriented approach and experience in supporting value
creation across its investments. This is a testament to the hard work of Team Schein to advance our leadership as a solutions-driven innovator for health care professionals, said Stanley M. Bergman, Chairman of the Board and Chief Executive
Officer of Henry Schein. We regularly engage with our shareholders and welcome their constructive dialogue, advice, and recommendations. We look forward to collaborating with Max, Dan, and Bob in pursuing the opportunities ahead of us and
building on Henry Schein s incredible foundation.
We have long admired Stan and the broader Henry Schein organization.
KKR is excited to support Henry Schein in its mission of enabling dental and medical practitioners, and believe the Company has tremendous growth potential. We look forward to working with the management team on strategic and operational initiatives
to drive value for all of Henry Schein s stakeholders, said Mr. Lin.
Henry Schein is an exceptional company with a
well-earned reputation for innovation, quality relationships with customers, and a talented team. I am honored to join the Henry Schein Board and look forward to contributing to creating significant value for all of Henry Schein s stakeholders
in the years ahead, said Mr. Hombach.
Upon consummation of the transactions, the Company will issue new shares of common stock to
funds affiliated with KKR for an investment of $250 million, based on market price. KKR is funding this investment primarily from North America Fund XIII. As part of the agreement, KKR has also agreed to customary voting and other provisions.
The consummation of the transactions is subject to customary closing conditions, including the expiration or termination of any waiting period under the Hart-Scott-Rodino Act and any foreign regulatory approvals. The full agreement between Henry
Schein and KKR will be filed on a Form 8-K with the Securities and Exchange Commission (the SEC ).
Preliminary Unaudited Fourth-Quarter and Full-Year 2024 Financial Results
Henry Schein also today reported preliminary unaudited revenue, Adjusted EBITDA, earnings, and operating cash flow for the fourth quarter and
fiscal year ended December 28, 2024:
Exhibit A includes the GAAP to non-GAAP reconciliation of
preliminary net income and preliminary earnings per share. Exhibit B includes a reconciliation of preliminary GAAP net income to preliminary Adjusted EBITDA.
Preliminary Full-Year 2025 Financial Guidance
Henry Schein also today announced preliminary financial guidance for 2025. Revenues and non-GAAP
diluted earnings per share are both expected to grow in the range of low to mid-single digits in 2025 as compared to 2024. Adjusted EBITDA is expected to grow in a
mid-single digit range in 2025 as compared to 2024.
Guidance is for current continuing operations
as well as announced acquisitions and does not include the impact of restructuring and integration expenses, amortization expense of acquired intangible assets, certain expenses directly associated with the cybersecurity incident or any potential
insurance claim recovery, and extraordinary legal and advisory expenses. This guidance also assumes modest improvement in the dental and medical markets during the year, supported by our strategic initiatives and recent investments, a net positive
contribution from our restructuring plan offset by investments in technology and new product launches, and that foreign currency exchange rates remain generally consistent with 2024 levels.
The Company is providing preliminary guidance for 2025 diluted EPS on a non-GAAP basis and for preliminary 2025 Adjusted EBITDA, as noted above. The
Company is not providing a reconciliation of its preliminary 2025 non-GAAP guidance to its preliminary 2025 diluted EPS prepared on a GAAP basis, or its preliminary 2025 Adjusted EBITDA to net income prepared
on a GAAP basis. This is because the Company is unable to provide without unreasonable effort an estimate of restructuring costs related to an ongoing initiative to drive operating efficiencies, including the corresponding tax effect, which will be
included in the Company s preliminary 2025 diluted EPS and net income prepared on a GAAP basis. The inability to provide this reconciliation is due to the uncertainty and inherent difficulty of predicting the occurrence, magnitude, financial
impact, and timing of related costs. Management does not believe these items are representative of the Company s underlying business performance. For the same reasons, the Company is unable to address the probable significance of the
unavailable information, which could be material to future results.
Share Repurchase Authorization
In addition, the Company s Board of Directors has authorized an increase of $500 million to the Company s stock repurchase
program, with $250 million to be executed through accelerated share repurchases.
Fourth Quarter and Full-Year 2024 Results and Conference Call
The Company intends to release its fourth quarter and full-year 2024 financial results before the stock market opens on Tuesday,
February 25, 2025, and will provide a live webcast of its earnings conference call on the same day beginning at 8:00 a.m. Eastern time.
Centerview Partners LLC and Evercore Inc. are serving as financial advisors and Cleary Gottlieb Steen & Hamilton LLP is
serving as legal advisor to Henry Schein. Kirkland & Ellis LLP is serving as legal advisor to KKR.
Max Lin leads the Health Care industry team within KKR. He is a member of the Investment Committee and Portfolio Management Committee for
Americas Private Equity, the Health Care Strategic Growth Investment Committee, and the Global Conflicts and Compliance Committee. Since joining KKR in 2005, Mr. Lin has overseen a number of investments in the areas of dental services and other
health care providers, medical products and equipment, and health care software and information technology. He holds a B.S. and B.A.S., summa cum laude, from the University of Pennsylvania and an M.B.A. from Harvard Business School.
About William K. Dan Daniel
Mr. Daniel has over three decades of global leadership experience in Industrial and Healthcare sectors, including 14 years as Executive
Vice President at Danaher, where he oversaw multiple segments and played a key role in advancing the company s culture and business system. He also served as executive sponsor of Danaher s Diversity & Inclusion Council before
retiring in 2020. Mr. Daniel has most recently served as an Executive Advisor to KKR.
About Robert J. Hombach
Mr. Hombach served as Executive Vice President, Chief Financial Officer and Chief Operations Officer of Baxalta Inc., a public
biopharmaceutical company, until it was acquired by Shire plc, in June 2016. Baxalta was spun off from its parent, Baxter International Inc. in July 2015, where Mr. Hombach served as Corporate Vice President and Chief Financial Officer.
Mr. Hombach currently serves on the board of BioMarin Pharmaceuticals Inc., a public biotechnology company, and Embecta Corporation, a public diabetes company. He has also previously served on the boards of Aptinyx Inc., CarMax, Inc., Naurex,
Inc., and Surgical Innovation Associates, Inc. Mr. Hombach holds an M.B.A. from Northwestern University s J.L. Kellogg Graduate School of Management and a B.S. in Finance cum laude from the University of Colorado.
About Henry Schein, Inc.
Inc. (Nasdaq: HSIC) is a solutions company for health care professionals powered by a network of people and technology. With approximately 26,000 Team Schein Members worldwide, the Company s network of trusted advisors provides more than
1 million customers globally with more than 300 valued solutions that help improve operational success and clinical outcomes. Our Business, Clinical, Technology, and Supply Chain solutions help office-based dental and medical practitioners work
more efficiently so they can provide quality care more effectively. These solutions also support dental laboratories, government and institutional health care clinics, as well as other alternate care sites.
Henry Schein operates through a centralized and automated distribution network, with a selection of more than 300,000 branded products and
Henry Schein corporate brand products in our distribution centers.
A FORTUNE 500 Company and a member of the S&P 500 index, Henry Schein is headquartered in Melville, N.Y., and has operations or affiliates in 33 countries and territories. The Company s sales reached $12.3 billion in 2023, and have
grown at a compound annual rate of approximately 11.5 percent since Henry Schein became a public company in 1995.
For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein,
Instagram.com/HenrySchein, LinkedIn.com/Company/HenrySchein, and @HenrySchein on X.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims
to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in
private equity, credit and real assets and has strategic partners that manage hedge funds. KKR s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to
KKR s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR s website at www.kkr.com. For additional information
about Global Atlantic Financial Group, please visit Global Atlantic Financial Group s website at www.globalatlantic.com.
Regarding Forward-Looking Statements and Use of Non-GAAP Financial Information
with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the
forward-looking statements, expectations and assumptions expressed or implied herein.
The information set forth in this press release,
including statements regarding the expected changes to the Board, the shares to be issued in the Investment, satisfaction of the conditions set forth in the agreement, our preliminary, unaudited financial results for 2024 and our initial 2025
financial guidance constitute or may be deemed to constitute forward-looking statements (including within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995). These expectations and
statements are prospective in nature and are subject to risks and uncertainties and are not guarantees of future performance, including statements about the consummation of the expected changes to the Board or the Investment and the anticipated
benefits thereof. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements.
Some forward-looking statements discuss the
Company s plans, strategies and intentions and are generally identified by the use of such terms as will be, subject to, may, could, expect, intend, believe,