Henry Schein Snaps Up A Major Stake in Prism Medical to Enter Home Health Market

Healthcare solutions provider Henry Schein acquired a majority stake in Prism Medical Products, LLC, a privately-held provider of specialty home medical supplies with expertise in advanced wound care products.

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This acquisition marks the entry of Henry Schein Medical, the US medical division of Henry Schein (HSIC), into the lucrative home medical equipment and supplies market. Prism Medical has over 200 team members and generated net revenue of about $52 million in the 12 months ended September 30, 2020.

Henry Schein did not reveal the financial terms of the deal. It expects the Prism acquisition to be neutral to its 2021 diluted EPS and accretive thereafter. (See HSIC stock analysis on TipRanks)

Commenting on the acquisition, Henry Schein’s CEO Stanley M. Bergman stated, “Expanding beyond our core base of office-based physicians and entering the home health market has been a long-standing strategic goal of Henry Schein’s medical business, and with PRISM we have the ideal partner with a strong brand and a complementary business model.”

On Jan. 4, Baird analyst Jeff Johnson upgraded Henry Schein to Buy from Hold and raised the price target to $79 from $70. The analyst expects the company’s dental patient volumes to improve sequentially throughout this year and sees “a sentiment-driven potential recovery.”

Currently, the Street has a cautiously optimistic outlook, with a Moderate Buy analyst consensus based on 2 Buys. The average price target of $75.50 indicates an upside potential of 11.4% from current levels. Shares have risen only 1.8% over the past year.