M&A

30 November, 2009

UPDATE 1-Henry Schein to merge animal health unit with Butler

* Henry Schein to pay $55 mln for 50.1 pct stake in new co

* New co to incur $300 mln in debt at closing

* Deal to hurt Henry Schein's FY10 EPS by 2-4 cents

Nov 30 (Reuters) - Henry Schein Inc (HSIC.O) and Butler Animal Health Supply said they will combine their animal health businesses, with Henry Schein paying about $55 million in cash for a majority share of the new company.

The new firm, named Butler Schein Animal Health, will be 50.1 percent owned by Henry Schein.

The owners of Butler will receive about $155 million in cash from the transaction with Henry Schein and the recapitalization.

Butler Schein Animal Health will incur about $300 million in debt at closing, which will be reflected on Henry Schein's balance sheet, the companies said in a joint statement.

The deal, which is expected to close at year-end, is likely to hurt Henry Schein's earnings by 2 cents to 4 cents a share in 2010, mainly due to integration expenses. Earlier this month, the medical products and services provider had forecast 2010 earnings of $3.40 to $3.56 a share.

In 2011, the transaction is expected to add to Henry Schein's earnings by 2 cents to 4 cents a share.

Shares of the company, which provides products ranging from surgical supplies, bandages, diagnostics, disinfectants to office accessories like envelopes to furniture, closed at $50.37 Friday on Nasdaq. (Reporting by Esha Dey in Bangalore; Editing by Anne Pallivathuckal) ((esha.dey@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: esha.dey.reuters.com@reuters.net))

Source: http://www.reuters.com