DENTSPLY Sirona Inc. XRAY recently announced the completion of the merger between DENTSPLY International and Sirona Dental Systems.
The merged entity, now known as DENTSPLY Sirona, will have a pro forma equity value of about $13.3 billion (based on the closing prices of both the companies as on Sep 14, 2015). The new entity will trade on Nasdaq under the ticker “XRAY”.
Under the terms of the newly-inked deal, shareholders of Sirona will get 1.8142 shares of DENTSPLY for each existing Sirona share. Meanwhile, DENTSPLY shareholders will now hold 58% while Sirona shareholders will own 42% of the combined company.
DENTSPLY Sirona also plans to buy back $500 million worth of shares, now that the deal has finally closed. In addition, the new company expects to continue to pay DENTSPLY's current dividend of 29 cents per share which is expected to entice investors, going forward.
The united entity is already touted as one of the leading global manufacturers of professional dental products and materials. DENTSPLY Sirona will offer a range of complementary products for dental offices – from fluoride rinses to dental chairs.
The combined unit is also likely to achieve consequential cost and revenue synergies, on the back of expanded product portfolio, bigger customer base and better infrastructure. In fact, the merger is expected to deliver annual pre-tax synergies of more than $125 million by the third year following the close of the deal.
Zacks Rank & Key Picks
Currently, DENTSPLY Sirona carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical sector are Abiomed ABMD, CryoLife CRY and Luminex LMNX. All the stocks sport a Zacks Rank #1 (Strong Buy).
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