Patterson Companies PDCO recently announced that it has entered into a definitive agreement to be acquired by Patient Square Capital (Patient Square), a dedicated healthcare investment firm.

Patterson’s shareholders will receive $31.35 in cash per share per the acquisition agreement with Patient Square, indicating a 49% premium over its 30-day volume-weighted average price as of Dec. 4, 2024. The total transaction is valued at approximately $4.1 billion, including the refinancing of Patterson’s receivables facilities.

Once the acquisition is completed, Patterson, which connects dental and animal health customers with a wide range of products and services, will become a privately held company. This transaction is expected to be closed in the fourth quarter of fiscal 2025, subject to the receipt of its shareholder approval, regulatory approvals and the satisfaction of other customary closing conditions.

Likely Trend of PDCO Stock Following the News

Following the announcement, shares of the company surged 34.5% and closed at $31.08 on Friday. In the year-to-date period, PDCO’s shares have gained 9.3% compared with the industry’s 2.5% growth. The S&P 500 increased 27.8% in the same time frame.

Meanwhile, PDCO currently has a market capitalization of $2.74 billion.

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More on PDCO’s Acquisition Deal With Patient Square

Patient Square is a dedicated healthcare investment firm with approximately $11 billion in assets under management as of Sept. 30, 2024. The firm aims to achieve strong investment returns by partnering with growth-oriented companies and top-tier management teams whose products, services and technologies improve health.

The merger agreement includes a 40-day “go-shop” period that permits the Patterson board and its advisors to actively solicit alternative acquisition proposals from third parties.

Recent Quarterly Performance of PDCO

Patterson Companies delivered an adjusted earnings per share of 47 cents in the second quarter of fiscal 2025, down 6% year over year. Its registered revenues improved 1.3% year over year to  $1.67 billion.

In the last reported quarter, the Dental segment of PDCO reported revenues of $611.7 million, down 2.3% from the year-ago quarter. Revenues in the Animal Health segment totaled $1.05 billion, up 2.9% year over year on a reported basis.

PDCO’s Recent Developments

In November, Patterson Dental Supply, Inc., a subsidiary of PDCO, announced an agreement in principle between Patterson and PDS Health, a leading dental and medical support organization, to extend their strategic relationship through the end of 2027. This extension allows Patterson to continue as the premier distributor for all merchandise, services, technology and core equipment across PDS Health’s network of more than 1,000 supported practices nationwide.

PDCO’s Zacks Rank & Stocks to Consider

PDCO carries a Zacks Rank #4 (Sell) at present.

Some better-ranked stocks from the medical industry are Masimo MASI, AngioDynamics ANGO and Globus Medical GMED.

Masimo, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 10.4% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Masimo’s shares have risen 37.2% year to date compared with the industry’s 6.7% growth.

AngioDynamics, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 38.2% for 2025. ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.

AngioDynamics’ shares have lost 8.9% year to date against the industry’s 6.7% growth.

Globus Medical, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.1%. Its shares have risen 56.5% year to date compared with the industry’s 6.7% growth.

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