Healthcare distributor Patterson Companies to go private in $4.1bn buyout by Patient Square Capital

In a landmark deal, Patterson Companies Inc. (Nasdaq: PDCO) announced on Wednesday that it has entered into a definitive agreement to be acquired by the private equity firm Patient Square Capital. The transaction, valued at approximately $4.1 billion, sent Patterson’s stock skyrocketing 34.36% to $31.10, marking the largest same-day gain in its trading history, as per Dow Jones Market Data.

Under the agreement, Patterson shareholders will receive $31.35 per share in cash, reflecting a premium of approximately 49% over the company’s 30-day volume-weighted average price as of December 4, 2024. The Patterson Companies acquisition also includes the refinancing of its receivables facilities, solidifying its valuation and reflecting a clear strategic growth opportunity.

Strategic Evolution for Patterson

Patterson Companies, a healthcare distribution leader in dental and animal health products across North America and the U.K., emphasized the strategic benefits of the deal. The company’s President and CEO, Don Zurbay, stated that the transaction represents a significant step in Patterson’s growth trajectory. He highlighted that it ensures shareholder value maximisation while positioning the firm for sustained investment and expansion.

“This agreement underscores the strength of Patterson’s brand and team while enabling us to partner with an investor like Patient Square Capital that shares our vision for long-term growth,” said Zurbay.

Patient Square Capital, which manages assets of approximately $11 billion, echoed similar sentiments. The firm’s Managing Partner, Jim Momtazee, expressed excitement about building on Patterson’s “long and proud legacy” and leveraging its strong market position for future advancements.

Deal Financing and Timeline

The Patterson Companies acquisition will be financed through a mix of equity and debt funding. Key financiers include Citi, UBS Investment Bank, and Wells Fargo Bank N.A. The transaction is subject to shareholder approval, regulatory clearance, and customary closing conditions, with completion anticipated in the fourth quarter of Patterson’s fiscal 2025 timeline.

In line with corporate governance practices, Patterson’s Board of Directors, excluding Zurbay, unanimously approved the agreement. The deal also includes a 40-day “go-shop” provision, allowing Patterson to explore alternative proposals.

Transition to Private Ownership

Following the closure of the definitive agreement announced, Patterson will become a privately held company and delist from the NASDAQ Global Select Market. The firm’s headquarters will remain in St. Paul, Minnesota, ensuring continuity in its operations and workforce.

A Legacy of Innovation and Expertise

Patterson Companies has long been recognized as a healthcare distribution leader for its comprehensive portfolio, robust network, and dedicated customer service. The strategic growth opportunity offered through this partnership aligns with Patient Square’s long-term investment strategy, promising enhanced growth.

This acquisition underscores the ongoing evolution of the healthcare industry and positions Patterson Companies to thrive under private equity leadership.