Private equity firm Kohlberg Kravis Roberts (KKR) has acquired a strategic stake in Henry Schein, the world's largest dental and medical supply distributor. Through the investment, which could grow to as much as 14.9% with further open-market purchases, KKR became the largest shareholder aside from index funds.
Bloomberg reported that KKR invested $250 million (about 335 billion won) through a new share issuance to secure a 12% stake. Henry Schein officially announced the investment in a statement on January 29.
Investment Born of Activist Fund Pressure
Henry Schein had faced pressure from a small activist fund, Ananym Capital Management, to cut costs and replace its chief executive. The pressure was aimed at CEO Stanley Bergman, who has led the company since 1989. Alongside KKR's investment, three new members joined the board: Max Lin, who leads KKR's healthcare practice; William Daniel, a former Danaher vice president; and Robert Hombach, a former CFO of Baxalta. Henry Schein said the new directors would bring financial, operational, and healthcare expertise, including in dentistry.
What Kind of Company Is Henry Schein
Henry Schein is the world's largest distributor supplying materials and equipment to dental clinics and private practice hospitals. It serves more than a million customers in 33 countries. Its 2024 revenue was provisionally tallied at $12.7 billion (about 17 trillion won), and it projected mid-single-digit growth in both revenue and earnings per share for 2025. No matter how good a dental material maker's products are, they struggle to reach individual clinics without going through a distribution network like this.
Ties to Korea's Dental Industry
Korean companies have a foothold in this distribution network as well. Vatech, a maker of dental imaging equipment, partnered with Henry Schein in 2023 to supply its products, including the low-dose X-ray diagnostic device Green CT, to the North American market. At the time, Vatech explained that Henry Schein was a distributor holding 30% of the U.S. dental diagnostic equipment market and 80% of corporate dental network chains. For Korean manufacturers looking to enter the U.S. market, a relationship with a major distributor like this becomes an important variable.
In Korea, there have also been reports of private equity investment leading to debt problems at dental chains. This Henry Schein case is different in nature, since it involves board representation through an equity stake rather than debt.
For now, dental clinics and patients in Korea won't feel any immediate change. But as private equity gains a voice on the board over cost structures and operations, any resulting changes to distribution terms or product lineups could ripple out to the manufacturers that do business with Henry Schein and the clinics that use their products.