KKR gains foothold in Henry Schein

Jeremy Booth, Dental Tribune International

Fri. 7. February 2025

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NEW YORK, US: Henry Schein is set to have a new major shareholder. The US-based global dental distributor has announced a deal of purchase and collaboration with KKR, under which the private equity firm will buy US$250 million (€239.6 million*) worth of Henry Schein common stock and two KKR representatives will join the Henry Schein board of directors. Being the owner of North American dental support organisations (DSO) Heartland Dental and 123Dentist, KKR is no stranger to the industry. Henry Schein said that the two organisations will be working together in pursuit of business opportunities.

Henry Schein made the announcement on 29 January, confirming a Wall Street Journal report that piqued the interest of investors. Henry Schein performed well in 2024, despite a challenging business environment and the costly aftermath of a cyber-attack in October 2023 that affected its distribution and e-commerce infrastructure. According to Reuters, the company has reportedly been under pressure from investors to better compete with other large healthcare distributors, including the US multinational Cardinal Health.

Henry Schein confirmed that KKR’s investment would give it a 12% stake, making it the largest non-index fund shareholder. KKR will be permitted to buy additional Henry Schein stock on the open market, but its total holdings in the company will be capped at 14.9%. Henry Schein said that it will issue new common stock shares to KKR based on market price, totalling US$250 million.

According to the press release, Henry Schein and KKR will work together to drive the next phase of growth by focusing on strategic expansion, operational improvements, capital allocation and broad-based employee equity ownership.

Stanley M. Bergman, who took the reins as CEO and chairman of the board at Henry Schein in 1989, received the Dirk Van Dongen Lifetime Achievement Award from the National Association of Wholesaler-Distributors in January.

Max Lin, a partner at KKR who heads its healthcare industry team, will join Henry Schein’s Strategic Advisory Committee. He will be appointed vice chair of the company’s Nominating and Governance Committee, which oversees the composition of the board of directors and is leading the search for a successor to Henry Schein’s long-standing CEO, Stanley M. Bergman. KKR executive adviser William Daniel, who served for 14 years as executive vice president at the dental company Danaher before it was spun off into Envista Holdings, will join Henry Schein’s Compensation and Strategic Advisory committees.

Henry Schein also announced the separate appointment of Robert J. Hombach, who is a seasoned healthcare executive with extensive experience in finance and corporate strategy, to the board as an independent director, temporarily bringing the total of board members to 16. The number will be reduced to 14 after the company’s annual meeting later this year.

Bergman commented: “Our board and management have great respect for KKR, including its partnership-oriented approach and experience in supporting value creation across its investments.” He added: “We regularly engage with our shareholders and welcome their constructive dialogue, advice and recommendations. We look forward to collaborating with Max, Dan and Bob in pursuing the opportunities ahead of us and building on Henry Schein’s incredible foundation.”

Lin said: “We have long admired Stan and the broader Henry Schein organisation. KKR is excited to support Henry Schein in its mission of enabling dental and medical practitioners and believe the company has tremendous growth potential. We look forward to working with the management team on strategic and operational initiatives to drive value for all of Henry Schein’s stakeholders.”