Patterson Companies to Be Acquired by Patient Square Capital

St. Paul, Minnesota-based Patterson Companies will be sold to a health-focused private equity firm for $4.1 billion, according to several news reports today.

On Wednesday, Patient Square Capital, a healthcare investment firm, agreed to acquire Patterson Companies, a dental and animal health product distributor, for more than $4B according to a press release.

Under the terms of the agreement, Patterson shareholders will receive $31.35 in cash per share, representing an approximately 49% premium to Patterson’s 30 calendar-day volume-weighted average price (VWAP) ending December 4, 2024 (the last trading day before Patterson announcing the evaluation of strategic alternatives).

The company had announced it is exploring strategic options, including a sale or merger, to boost shareholder value, after it recently announced its second-quarter earnings dropped by one-third year over year.

“Today’s announcement marks an exciting next step in Patterson’s evolution and delivers immediate and certain value for our shareholders and positions us to continue to invest in serving our customers and driving growth,” Don Zurbay, president and chief executive officer of Patterson, says in a press release. “This transaction follows a review of strategic alternatives by our Board of Directors, with assistance from our independent advisors, maximizing our value and enabling Patterson to continue to execute our strategy well into the future.”

Earnings were mixed, “given the challenging end market environment,” adds Zurbay.

Patient Square Managing Partner Jim Momtazee adds: “I have closely followed Patterson for decades and long admired the value the company provides to partners and customers. Patient Square is excited to work closely with management on the next chapter of growth for the business building on its long and proud legacy.”

Patterson’s Board of Directors, excluding Zurbay given his position as a Management Director, has unanimously approved the transaction.

Consistent with the Patterson Companies’ commitment to strong governance practices, Zurbay has recused himself from participating in any deliberations or approvals related to the transaction, according to the press release.

The transaction will be financed through a combination of committed equity financing.

The transaction is expected to close in the fourth quarter of Patterson’s fiscal 2025, subject to the receipt of shareholder approval, regulatory approvals, and the satisfaction of other customary closing conditions.

Upon completion of the transaction, Patterson will become a privately held company, and its common stock will no longer be traded on the NASDAQ. Patterson will maintain its headquarters in St. Paul, Minnesota.

Patterson Companies connects dental and animal health customers in North America and the U.K. to the latest products, technologies, services and innovative business solutions that enable operational and professional success.

Patient Square Capital, meanwhile, is a dedicated health care investment firm with approximately $11 billion in assets under management as of September 30, 2024. The firm aims to achieve strong investment returns by partnering with growth-oriented companies and top-tier management teams whose products, services, and technologies improve health.