((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Adds transaction details in paragraph 3, analyst commentary in paragraphs 4 and 6, and context of the company's difficulties) by Christy Santhosh
Patterson Companies PDCO.O has agreed to be taken private for about $4.1 billion by healthcare investment firm Patient Square Capital, the animal health and dental equipment supplier said Wednesday.
The $31.35 per share offer represents a 35.7% premium to the stock's last close. Shares were trading at $31 after markets opened.
Patient Square, which manages approximately $11 billion in assets, was part of a consortium that bought contract research services provider Syneos Health in 2023.
Elizabeth Anderson, an analyst at Evercore ISI, said the investment firm's track record of turning around troubled assets such as Syneos added further credibility to the offer.
The agreement provides a 40-day period for Patterson's board of directors and its advisors to pursue other acquisition proposals.
“Although this agreement provides for a 40-day period, we doubt that a significantly higher alternative offer will emerge,” said Jeff Johnson, an analyst at Baird.
Earlier this month, Minnesota-based Patterson said it was evaluating strategic alternatives, including a sale or merger, after lowering its annual profit forecast.
Analysts have highlighted falling demand for dental and surgical products as inflation-battered customers prioritize purchasing essentials.
The company's animal health segment accounts for more than 60% of its revenue and distributes prescription vaccines and diets, among others. Its dental segment includes the supply of instruments used in clinics.
Shares are down more than 18% this year through Tuesday as the company faces declining sales and disruption from the hack of Change Healthcare, the technology unit of health insurer UnitedHealth Group
UNH.N.
The February hack had a ripple effect on players in the U.S. healthcare system, as the disruptions triggered by the attack impacted pharmacy electronic refills and insurance transactions.
The company said in August it would take cost and management measures to offset pressure on its business.
Mr. Patterson said Wednesday that the deal is expected to close in the fourth quarter of fiscal 2025.
