A little over two years ago, Covetrus, one of the US’s big three animal health distributors, became a private company after the acquisition by funds Clayton, Dubilier & Rice and TPG Capital and we learned this week that another of the big three is also going private.
There was a hint of something strategic happening at Patterson Companies during the company’s 2nd quarter earnings call last week. The company announced this week that it will be taken private by Patient Square Capital in a $4.1B deal. Through the 2Q, which ended in October, Patterson had YTD revenue of $3.2 billion (83% in the US) with $2.0 billion coming from its animal health business and $1.2 billion from its dental distribution business. The animal health distribution business is almost twice as large as the dental business and was performing better than it too.
We also note that the biggest competitor to the big three, Midwest Veterinary Supply, closed last month on its acquisition of Victor Medical, which provided Midwest greater access to veterinary clinics in the western US.
Publicly-traded companies turn into private companies for lots of reasons: freedom from public market scrutiny, strategic and operational flexibility, valuation and market discrepancies, and several others. We will have to wait until next year to see what changes are ahead for Patterson but we hope they are all positive.
Bob Jones
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