Patterson Companies is moving closer to becoming a private company after its shareholders approved its acquisition by investment firm Patient Square Capital at a special meeting on Tuesday.
“The Patterson team is excited about this partnership with Patient Square Capital and beginning our next chapter as a private company,” said Don Zurbay, Patterson’s president and chief executive officer.
The approval follows a merger agreement dated Dec. 10, under which Patient Square Capital will acquire Patterson in an all-cash transaction valued at approximately $4.1 billion. The deal offers Patterson shareholders $31.35 per share of common stock. Patient Square Capital had about $12 billion in assets under management as of Dec. 31.
Patterson expects the transaction to close later this month. Upon completion, the company will become privately held, and its common stock will no longer be traded on the Nasdaq Global Select Market.
Private equity trend
Private equity firms continue to consolidate the U.S. healthcare services market, including dental laboratories, clinics and equipment suppliers such as Patterson. Last year, Steris, an American-Irish medical equipment company specializing in sterilization and surgical products, sold its dental segment, HuFriedyGroup, to private equity firm Peak Rock Capital in a $787.5-million deal. KKR & Co. last year also became the largest non-index fund shareholder in Henry Schein, taking a 12 per cent stake with the option to increase it to nearly 15 per cent.
Private investors are drawn to healthcare acquisitions for their potential operational efficiencies, market expansion opportunities and synergies across acquired businesses.
“We believe this collaboration will enable us to continue investing in serving our customers and our business, accelerate our growth, and be well-positioned to achieve our strategic priorities,” Zurbay said.
“The broader shift toward consolidation can bring efficiencies—but also the risk of diminished competition and choice.” Gurtej Varn.
What does this mean for dentists?
Gurtej Varn, a wealth advisor at White Coat Financial Inc., said Patterson’s shift to private ownership is a “meaningful development” for the dental community, though it could have both positive and negative implications for dentists.
“The broader shift toward consolidation can bring efficiencies—but also the risk of diminished competition and choice,” Varn said.
When it comes to pricing models, going private is a “two-sided coin.”
“On one hand, it removes the pressure of quarterly earnings and the constant scrutiny of public markets,“ he said. “This can allow Patterson to make longer-term investments in areas like digital infrastructure, logistics and value-added services—investments that may have been harder to justify while trying to meet short-term shareholder expectations.“
For dental professionals, this could mean more “integrated and innovative offerings” from Patterson.
“For dentists, it will be important to monitor whether service quality and responsiveness improve—or if they’re being quietly adjusted behind the scenes.” Gurtej Varn.
However, private equity ownership introduces a “different set of performance metrics, most notably an intensified focus on profitability and EBITDA growth.”
“This shift could manifest in changes to pricing models, supply chain structures or product bundling strategies,” Varn said.
While Patterson has indicated a continued focus on serving customers, the wealth advisor noted there is potential for margin optimization initiatives that may affect how dental practices purchase and pay for products and services.
The same applies to customer service. Patterson could “invest more deeply in customer service, technical support and tailored solutions for clinics. But there’s also the risk of streamlining or consolidation if certain divisions are seen as underperforming.”
“For dentists, it will be important to monitor whether service quality and responsiveness improve—or if they’re being quietly adjusted behind the scenes,” Varn said.
