KKR Takes Major Stake in Henry Schein, Securing Board Influence

Strategic Investment Marks Significant Shift

Private equity firm KKR has established itself as Henry Schein’s largest non-index fund shareholder, acquiring a 12% stake in the medical products distributor. The development, announced on Wednesday, comes as Henry Schein faces increased scrutiny from investors regarding its competitive position in the medical supply distribution sector.

The announcement had an immediate positive impact on Henry Schein’s market performance, with shares rising more than 3% to $78.54 in premarket trading. The company, currently valued at approximately $9.5 billion, has recently faced pressure to enhance its competitive standing against major industry players such as Cardinal Health.

Recent Investor Activity

Prior to KKR’s investment, other stakeholders had already begun pushing for organizational changes. Notably, Ananym Capital Management had previously indicated its intention to nominate up to six directors to Henry Schein’s board. Their agenda included initiating a CEO search, implementing cost reduction measures, and improving capital allocation strategies.

The agreement with KKR has resulted in several key board appointments. Max Lin, a KKR partner who leads the healthcare industry team, will join as an independent director and serve as vice chair of the nominating and governance committees. In this role, Lin will participate in crucial governance matters, including board composition and CEO succession planning.

William Daniel, an executive advisor to KKR and former Danaher executive, has also been appointed as an independent director. Additionally, Robert Hombach has been named as an independent director and is set to join the board’s Strategic Advisory Committee.

KKR’s Industry Experience

KKR’s investment in Henry Schein is supported by their substantial experience in the dental sector, where they maintain ownership of dental organizations Heartland Dental and 123Dentist. This expertise could prove valuable as Henry Schein navigates its strategic direction moving forward.

The development was initially reported by The Wall Street Journal, marking a significant shift in Henry Schein’s corporate governance structure and potentially its future strategic direction.