After weeks of shopping for a buyer, Patterson Companies announced it will sell its medical therapy division for $715 million to Madison Dearborn Partners, a Chicago-based private equity firm.
Mendota Heights-based Patterson said in May that it planned to sell the long-held therapy equipment division as a way to finance its recent expansion into the farm animal equipment sector.
Patterson last month closed on its $1.1 billion purchase of Dallas-based Animal Health International, a move that doubled the size of its veterinary supply business. Patterson officials said they intend to grow that division and to continue focusing on its largest and most profitable business — dental equipment.
The sale of the therapy equipment division helped the company narrow its focus to dental and animal health, officials said.
“The acquisition of Animal Health International and divestiture of Patterson Medical are transformational moves for Patterson Companies and a key component of our strategic intent to take a broadened view of our markets,” said CEO Scott Anderson in a statement. “We believe that we can accelerate returns on invested capital and increase shareholder value by focusing on our closely aligned dental and animal health units.”
The sale of the therapy and rehabilitation business, called Patterson Medical, will close in Patterson’s fiscal second quarter, which ends in October. The unit had sales of $464 million and before-tax profit of $67 million during the last fiscal year.
Without the medical division, and with the newly added $1.5 billion Animal Health, Patterson has become a product distribution behemoth with about $5.4 billion in annual revenue.
Anderson said he believed the medical unit will thrive under new ownership.
“We received a strong offer from MDP,” he said. “We are also enthusiastic about MDP’s commitment to support Patterson Medical’s customers and employees going forward. We believe that the medical business is solid, with a strong product portfolio and a dedicated employee group, and is well positioned for future success.”
Patterson stock rose 1.27 percent to close at $49.27 a share Wednesday.