Henry Schein Announces Strategic Investment by KKR, Board Changes, and Provides Financial Results and 2025 Guidance
Henry Schein, Inc. (Nasdaq: HSIC), the world’s leading provider of health care solutions for office-based dental and medical professionals, today announced a strategic investment from funds affiliated with KKR, a globally renowned investment firm.
KKR’s Investment and Board Appointments
KKR will enhance its existing stake in Henry Schein by investing an additional $250 million in the company’s common stock. With this new investment, KKR will become the largest non-index fund shareholder, holding a 12% equity position in the company. This move underscores KKR’s strong confidence in Henry Schein, its management team, and the company’s BOLD+1 strategy, which focuses on driving sustainable growth and value creation. KKR also has the option to increase its stake to 14.9% through open market purchases.
As part of this agreement, two prominent executives from KKR will join Henry Schein’s Board of Directors. Max Lin, a partner at KKR and leader of the firm’s Health Care industry team within its Americas Private Equity platform, will take a pivotal role on the Board’s Nominating and Governance Committee, as well as the Strategic Advisory Committee. Lin’s leadership and expertise will play a key role in Henry Schein’s governance matters and the company’s CEO succession planning.
William K. “Dan” Daniel, an executive advisor to KKR and former Executive Vice President at Danaher Corporation, will also join the Board. Daniel’s extensive experience in corporate strategy and operations will provide valuable insights as a member of the Compensation and Strategic Advisory Committees.
Additionally, Henry Schein announced the appointment of Robert J. “Bob” Hombach as an independent director. Hombach, who previously served as the Executive Vice President, Chief Financial Officer, and Chief Operations Officer at Baxalta Inc. and CFO at Baxter International, brings deep financial and operational expertise to the Board. Hombach is expected to join the Strategic Advisory Committee.
These new appointments are expected to bring enhanced capabilities in finance, operations, and the healthcare sector to Henry Schein’s Board, further strengthening the company’s leadership team. Following the appointments, the Board will temporarily expand to 16 members before reducing to 14 members after the company’s 2025 Annual Meeting. The company plans to further streamline the Board’s composition over time.
Partnership with KKR: Strategic Goals
The partnership with KKR is expected to foster new growth opportunities for Henry Schein, particularly focusing on strategic growth, operational efficiency, capital allocation, and employee engagement. The two companies will collaborate closely to explore ways to create value for shareholders, with a special focus on expanding equity ownership across the workforce.
Henry Schein’s Chairman and CEO, Stanley M. Bergman, expressed confidence in the partnership with KKR, noting that KKR’s track record in driving value creation through its investments is well-aligned with the company’s goals. He emphasized that the company’s management team is committed to building on Henry Schein’s position as a leader in healthcare solutions, particularly for dental and medical professionals.
“We look forward to collaborating with Max, Dan, and Bob as we pursue exciting opportunities ahead and continue to strengthen Henry Schein’s foundation,” said Bergman. “Their extensive experience and strategic insights will be invaluable as we build the next chapter of growth for our company.”
Max Lin of KKR also expressed his enthusiasm about the partnership, saying, “We have long admired Henry Schein and its leadership under Stan Bergman. KKR is excited to support the company in its mission to enable dental and medical practitioners. We believe Henry Schein is well-positioned for significant growth, and we look forward to contributing to its success.”
Bob Hombach added, “Henry Schein has an outstanding reputation for innovation and quality customer relationships. I’m honored to join the Board and look forward to helping the company continue to thrive in the years ahead.”
Transaction Details
KKR will purchase additional shares of Henry Schein common stock, investing $250 million based on the market price. The investment will primarily be funded by KKR’s North America Fund XIII. The agreement includes customary provisions related to voting and other matters. The closing of the transaction is subject to standard closing conditions, including the expiration or termination of any waiting period under the Hart-Scott-Rodino Act and regulatory approvals from foreign authorities.
Preliminary Unaudited Financial Results for 2024
Henry Schein also shared preliminary, unaudited financial results for the fourth quarter and full fiscal year ending December 28, 2024.
- Revenue: In the fourth quarter, revenue totaled $3.2 billion, contributing to full-year revenue of $12.7 billion for 2024.
- Net Income: For the fourth quarter, GAAP net income was $94 million ($0.74 per diluted share), leading to full-year GAAP net income of $390 million ($3.05 per diluted share).
- Non-GAAP Net Income: The company reported fourth-quarter non-GAAP net income of $149 million ($1.19 per diluted share), with full-year non-GAAP net income of $605 million ($4.74 per diluted share).
- Adjusted EBITDA: Adjusted EBITDA for the fourth quarter was $270 million, while full-year Adjusted EBITDA for 2024 reached $1,061 million.
- Operating Cash Flow: Operating cash flow was $204 million for the fourth quarter, with full-year operating cash flow amounting to $848 million.
Preliminary Financial Guidance for 2025
Looking ahead, Henry Schein provided preliminary financial guidance for 2025. The company anticipates revenue growth and non-GAAP diluted earnings per share to increase by low to mid-single digits compared to 2024. Adjusted EBITDA is expected to see mid-single digit growth.
This guidance assumes modest improvement in both the dental and medical markets, supported by Henry Schein’s strategic initiatives, investments in technology and new product launches, and the net positive contribution from the company’s ongoing restructuring efforts. The guidance also assumes relatively stable foreign currency exchange rates.
It is important to note that this guidance excludes the impact of restructuring and integration expenses, amortization of acquired intangible assets, certain cybersecurity-related expenses, and other extraordinary legal and advisory costs. The company did not provide a reconciliation of non-GAAP guidance to GAAP earnings as certain variables related to restructuring costs and tax impacts remain unpredictable.
Stock Repurchase Authorization
As part of its capital allocation strategy, Henry Schein’s Board of Directors has authorized an additional $500 million for stock repurchases, including $250 million to be executed through accelerated share repurchases. This increase reflects the company’s commitment to returning value to its shareholders.
Upcoming Earnings Release and Conference Call
Henry Schein plans to release its fourth-quarter and full-year 2024 financial results on February 25, 2025, before the market opens. A live webcast of the earnings conference call will be available starting at 8:00 a.m. Eastern time on the same day.
