Henry Schein to spin off and merge its animal health business with Vets First Choice

|About: Henry Schein, Inc. (HSIC)|By:, SA News Editor

Henry Schein (NASDAQ:HSIC) and Vets First Choice announce plans for Schein to spin off its Animal Health business and merge it with Vets First Choice.

The new company, to be called Vets First Corp., will offer a new platform for veterinarians to grow their practices, improve client engagement, and drive better health outcomes for pets.

The transaction is structured as a "Reverse Morris Trust" transaction intended to be tax-free to Schein shareholders for U.S. tax purposes. Shares of Vets First Corp. common stock will be distributed to both the Companies in connection with the merger.

HSIC shareholders and Animal Health-related parties will own ~63% of the combined company while Vets First Choice investors will own ~37%.

Additionally, Schein expects to receive between $1B and $1.25B in cash on a tax-free basis as part of the transaction. These proceeds will be used for general corporate purposes, including share repurchases, repayment of indebtedness and acquisition opportunities.

The deal should close by year-end.

Shares of HSIC are up 4% premarket.

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