Share price of Henry Schein, Inc. (HSIC) rose 2.8% to eventually close at $138.55 yesterday, following the announcement that the company will distribute the entire line of dental equipment manufactured by A-dec in North America, effective from the second quarter of 2015.
A-dec, headquartered in Oregon, manufactures superior dental equipment solutions that are highly popular among dentists and their patients worldwide.
Henry Schein's decision to distribute A-dec's products in North America reflects the former's commitment to expand its customers' access to the widest range of dental equipment.
In its last reported third-quarter 2014, the dental segment of this leading healthcare provider to office-based practices experienced an impressive 9.6% sales growth in North America. Moreover, internal sales growth in local currencies stood at a multi-year high in the quarter for Henry Schein's dental merchandise in the North American region.
We believe the agreement with A-dec will duly consolidate Henry Schein's already-robust footprint on the North American soil, ushering in more profits from this region.
Henry Schein does not expect the transaction to have a material impact on its 2015 financial results. However, beyond 2015, this strategic expansion is expected to bring in additional revenues for Henry Schein in the North American market.
Henry Schein retains a Zacks Rank #3 (Hold). Better ranked med-dental/supply stocks include Bio-Reference Laboratories Inc. (BRLI), Halyard Health, Inc. (HYH) and Antares Pharma Inc. (ATRS). While Bio-Reference Laboratories and Halyard Health hold a Zacks Rank #1 (Strong Buy), Antares Pharma holds a Zacks Rank #2 (Buy).
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