Patterson Companies announced that it has entered into a definitive
agreement to be acquired by Patient Square Capital (Patient Square), a
dedicated healthcare investment firm. 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 prior to Patterson announcing the evaluation of strategic
alternatives), or a transaction value of approximately $4.1 billion,
including the refinancing of Patterson’s receivables facilities.
“Today’s announcement marks an exciting next step in Patterson’s
evolution and delivers immediate and certain value for our shareholders
while positioning us to continue investing in serving our customers and
driving growth,” said Don Zurbay, president and CEO of Patterson. “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 executing our strategy well
into the future.
“Patient Square recognizes the value of our brand and the quality of
our world-class team and is grounded in similar values that guide our
actions. They share the same long-term vision for our company, which
makes them an excellent partner for the next phase of our journey.”
Patient Square managing partner Jim Momtazee said, “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.”
Transaction Details
The company’s Board of Directors, excluding Zurbay given his position
as a management director, has unanimously approved the transaction.
Consistent with Patterson Companies’ commitment to strong governance
practices, Zurbay has recused himself from participating in any
deliberations or approvals related to the transaction.
The transaction will be financed through a combination of committed
equity financing provided by Patient Square Equity Partners, LP, as well
as committed debt financing to be led by Citi, UBS Investment Bank, and
Wells Fargo Bank N.A.
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. The merger agreement includes a 40-day “go-shop” period that
permits the Patterson Board and its advisors to actively solicit
alternative acquisition proposals from third parties.
Upon completion of the transaction, Patterson will become a privately
held company, and its common stock will no longer be traded on the
NASDAQ Global Select Market (Nasdaq). Patterson will maintain its
headquarters in St. Paul, Minnesota.
Advisors
Guggenheim Securities, LLC, is acting as the exclusive financial
advisor to Patterson, and Taft Stettinius & Hollister LLP is serving
as legal counsel to Patterson. Citi, UBS Investment Bank, and Wells
Fargo Securities, LLC, are serving as financial advisors, and Kirkland
& Ellis LLP and Greenberg Traurig, LLP, are acting as legal counsel
to Patient Square.
About Patterson Companies, Inc.
Patterson Companies, Inc. (Nasdaq: PDCO), 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. Our comprehensive portfolio,
distribution network, and supply chain are equaled only by our
dedicated, knowledgeable people who deliver unrivaled expertise and
unmatched customer service and support.
About Patient Square Capital
Patient Square Capital is a dedicated healthcare 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. Patient
Square utilizes deep industry expertise, a broad network of
relationships, and a partnership approach to make investments in
companies that will grow and thrive. Patient Square invests in
businesses that strive to improve patient lives, strengthen communities,
and create a healthier world. For more information, visit www.patientsquarecapital.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains statements that are
forward-looking statements within the meaning of the federal securities
laws. Forward-looking statements include information concerning the
proposed merger (“Merger”) with Paradigm Parent, LLC, a Delaware limited
liability company (“Parent”), and Paradigm Merger Sub, Inc., a
Minnesota corporation and a wholly owned subsidiary of Parent (“Merger
Sub”), and the ability to consummate the proposed Merger, our liquidity,
and our possible or assumed future results of operations, including
descriptions of our business strategies. These statements often include
words such as “believe,” “expect,” “project,” “potential,” “anticipate,”
“intend,” “plan,” “estimate,” “seek,” “will,” “may,” “would,” “should,”
“could,” “forecasts,” or similar words.
These statements are based on certain assumptions that
we have made in light of our experience in the industry, as well as our
perceptions of historical trends, current conditions, expected future
developments, and other factors we believe are appropriate in these
circumstances. We believe these assumptions are reasonable, but you
should understand that these statements are not guarantees of
performance or results, and our actual results could differ materially
from those expressed in the forward-looking statements due to a variety
of important factors, both positive and negative, that may be revised or
supplemented in subsequent releases or reports.
These statements involve risks, estimates, assumptions,
and uncertainties that could cause actual results to differ materially
from those expressed in these statements and elsewhere in this press
release. These uncertainties include, but are not limited to, the
inability to consummate the Merger within the anticipated time period,
or at all, due to any reason, including the failure to obtain required
regulatory approvals, satisfy the other conditions to the consummation
of the Merger, or complete necessary financing arrangements; the risk
that the Merger disrupts our current plans and operations or diverts
management’s attention from its ongoing business; the effects of the
Merger on our business, operating results, and ability to retain and
hire key personnel and maintain relationships with customers, suppliers,
and others with whom we do business; the risk that our stock price may
decline significantly if the Merger is not consummated; and the nature,
cost, and outcome of any legal proceedings related to the Merger.
Additional risks include dependence on suppliers to
manufacture and supply substantially all of the products we sell,
potential disruption of distribution capabilities, changes in demand due
to political, economic, and regulatory influences, and exposure to
litigation and government inquiries.
The foregoing review of important factors should not be
construed as exhaustive. The information contained in this press release
is made only as of the date hereof, even if subsequently made available
on our website or otherwise.
Additional Information and Where to Find It
This press release relates to the proposed Merger.
Parent and Merger Sub are indirect subsidiaries of funds managed and
advised by Patient Square Capital. A special meeting of the shareholders
of Patterson will be announced as promptly as practicable to seek
shareholder approval in connection with the proposed Merger. We expect
to file with the SEC a proxy statement and other relevant documents in
connection with the proposed Merger. Shareholders of Patterson are urged
to read the definitive proxy statement and other relevant materials
filed with the SEC when they become available because they will contain
important information about Patterson, Parent, Merger Sub and the
Merger. Shareholders may obtain a free copy of these materials (when
they are available) and other documents we file with the SEC at the
SEC’s website at www.sec.gov, at our website at www.pattersoncompanies.com
or by sending a written request to our Corporate Secretary at our
principal executive offices at 1031 Mendota Heights Road, St. Paul,
Minnesota 55120.
Participants in the Solicitation
Patterson, its directors and certain of its executive
officers and employees may be deemed to be participants in soliciting
proxies from its shareholders in connection with the Merger. Information
regarding the persons who may, under the rules of the SEC, be
considered to be participants in the solicitation of our shareholders in
connection with the Merger and any direct or indirect interests they
have in the Merger will be set forth in Patterson’s definitive proxy
statement for its special shareholder meeting when it is filed with the
SEC. Information relating to the foregoing can also be found our Annual
Report on Form 10-K for the year ended April 27, 2024 filed with the SEC
on June 18, 2024 and our definitive proxy statement for our 2024 annual
meeting of shareholders filed with the SEC on August 2, 2024 and our
recent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
To the extent that holdings of Patterson’s securities have changed since
the amounts set forth in our definitive proxy statement for our 2024
annual meeting of shareholders, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with the
SEC.
FEATURED IMAGE CREDIT: Kalhh from Pixabay.
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