U.S. Markets closed

Henry Schien Buys North American Rescue, Expands Medical Arm

Zacks Equity Research

Henry Schien, Inc. HSIC recently announced the completion of its acquisition of North American Rescue (NAR), a U.S.-based survivability and casualty-care medical products maker that caters to the defense and public-safety markets. This acquisition is expected to bolster Henry Schein Medical, the company’s medical business in the United States. This is also part of the company’s efforts to focus on adding more high-margin products to its portfolio.

The Deal at a Glance

Financial terms the deal, which was first announced in January, remain undisclosed. Henry Schein noted that NAR has a huge customer base and serves all branches of the U.S. military; various U.S. military departments and federal agencies; militaries of allied foreign countries; federal, state and local law enforcement departments; emergency medical service providers and fire departments plus community preparedness organizations including school districts besides commercial and community centers.

NAR provides products to treat and overcome the three most common causes of preventable combat deaths, namely hemorrhaging, tension pneumothorax and inadequate airway.

The company serves nearly 60% of its sales to the U.S. government. In fiscal 2018, NAR generated sales of approximately $184 million, reflecting a diversified portfolio of proprietary medical products.

Per Henry Schein, the deal is strategic and comes with a unique value proposition. The company believes that addition of NAR’s business will offer multiple areas with growth prospects and potential business synergies for Henry Schein Medical. Post integration, NAR will be able to sell more Henry Schein Medical and Henry Schein-branded products through its existing channels.

According to the company, NAR will help expand its Medical group geographic footprint, customer base, product offering and margins in both the United States and internationally, as it plans to advance the NAR business across the globe.

As stated earlier, Henry Schein expects NAR to be neutral to its 2019 earnings per share and be accretive thereafter.

Share Price Performance

Over the past six months, Henry Schein has underperformed its industry. The stock has plunged 31.7% against the 3.9% rise of the industry.

Key Picks

Henry Schien currently carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks in the broader medical space are ABIOMED, Inc., ABMD, Varian Medical Systems, Inc. VAR and Masimo, Inc. MASI, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


ABIOMED’s long-term earnings growth rate is expected at 27.67%.

Varian’s long-term earnings growth rate is projected at 8%.

Masimo’s long-term earnings are predicted to grow 15.60%.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


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
 
Masimo Corporation (MASI) : Free Stock Analysis Report
 
Varian Medical Systems, Inc. (VAR) : Free Stock Analysis Report
 
ABIOMED, Inc. (ABMD) : Free Stock Analysis Report
 
Henry Schein, Inc. (HSIC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research