Henry Schein’s Upcoming Animal Health Spin-Off Could Unlock 30% To 50% Upside

Henry Schien will be spinning-off its animal health business and merging it with Vets First Choice (VFC), a private company. We believe the transaction will unlock significant shareholder value.

HSIC disclosed in April, 5,100 vets were using VFC’s tech-enabled pharmacy platform, but our recent big data scrape indicates it is on pace for 9,000 vets by year-end (+76%).

We also conducted a survey of 100 vets using VFC and find strong user satisfaction, and meaningful revenue uplift opportunities benefiting both vets and HSIC alike.

In the coming weeks, we expect HSIC to provide more information on the spin, and eventually host an Analyst Day offering longer-term guidance. We expect the spin to open up a broader shareholder base, and attract significant analyst coverage.

HSIC/VFC will be the fastest growing play in the hot animal space. Our sum-of-the-parts base case yields $106/share assuming multiples in line with peers, and +50% should it receive a premium multiple.

https://seekingalpha.com/article/4208341-believe-henry-scheins-upcoming-animal-health-spin-will-unlock-30-percent-50-percent-upside