U.S. Markets open in 6 hrs 51 mins

Henry Schein's (HSIC) New Deal Boosts Ambulatory Surgery Market

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Henry Schein, Inc. HSIC recently announced a new investment in Stradis Medical, LLC (“Stradis Healthcare”), which will strengthen Henry Schein’s foothold in the ambulatory surgery market. Notably, the financial terms of the transaction were kept under wraps.

The transaction is projected to be neutral to Henry Schein’s 2021 diluted earnings per share, accretive thereafter.

For investors’ note, Atlanta-based privately held Stradis Healthcare offers medical device packaging and custom procedure kits and trays to surgical centers, oral surgeons and private practices nationwide. Notably, it is the only independent sterile medical kitting companies in the United States, with facilities in Atlanta and in Waukegan, IL.

The recent investment will boost Henry Schein’s focus on growing ambulatory surgery market.

Significance of the Investment

The addition of Stradis Healthcare to the Medical group will enable Henry Schein to develop a unique kitting, contract packaging and serialized pharmaceutical organization that will progress the mission of health care delivery by creating efficiencies and savings for providers as well as facilitating high-quality patient care.

Per management of Henry Schein, the majority investment in Stradis Healthcare will fortify Henry Schein’s prospects in the ambulatory surgery market and boost offering by combining product portfolios and capabilities together.

The majority-ownership partnership will allow Henry Schein to provide customized solutions to practitioners, medical device companies and healthcare distribution partners at the same time also creating new business opportunities.

Industry Prospects

Per a report by MarketsandMarkets, the global ambulatory surgical centers market is projected to reach $7.2 billion by 2025 from $2.1 billion in 2020, at a CAGR of 27.6%. Growing requirement to curtail escalating healthcare costs, shift from inpatient to outpatient surgical procedures as well as growing demand for IT solutions such as mhealth and telehealth for better management is driving the market.

Other Notable Partnership

In March 2021, Henry Schein collaborated with Black Coalition Against COVID-19 (“BCAC”) to advance its commitment to accelerate vaccine equity. The collaboration supports the company’s advocacy for vaccine equity and the vital role primary-care physicians and other office-based health care practitioners play in escalating COVID-19 vaccinations nationwide.

In January 2021, Henry Schein acquired a majority ownership position in Prism Medical Products, LLC (PRISM). The partnership expanded Henry Schein Medical’s continuum-of-care delivery model and facilitated direct interaction with patients.

Price Performance

Shares of the company have gained 36.5% in a year’s time compared with the industry’s growth of 46.8%.

Zacks Rank and Key Picks

Currently, Henry Schein carries a Zacks Rank #3 (Hold).

A few other better-ranked stocks from the broader medical space are DENTSPLY SIRONA, Inc. XRAY, Invacare Corporation IVC and McKesson Corporation MCK, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DENTSPLY SIRONA has a projected long-term earnings growth rate of 7%.

Invacare has an estimated long-term earnings growth rate of 57%.

McKesson has a projected long-term earnings growth rate of 7%.

5G Revolution: 3 Stocks to Make Your Move

With super high data speed, it will make current cell phones obsolete and unlock the full potential of big data, cloud computing, and artificial intelligence. In the next few years this industry is predicted to create 22 million jobs and a stunning $12.3 trillion in revenue.

Today you have an historic chance to pursue almost unimaginable gains like Microsoft, Netflix, and Apple in their early phases. Zacks has released a Special Report that reveals our . . .

  • Smartest stock for 5G telecom

  • Safest investment in 5G hardware

  • Single best 5G buy of all!

Download now. Today the report is FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report

McKesson Corporation (MCK) : Free Stock Analysis Report

Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research