Patterson Cos. CEO and Chairman Scott Anderson said Thursday he would step down from the position he has held since 2010 at the Mendota Heights-based supplier of dental and health products.
Former Chief Executive James Wiltz will become interim leader while a search committee looks for a successor, the company said on Thursday. Wiltz, who has been a board member since 2001 and was president and CEO from 2005 to 2010, began work at Patterson in 1969.
The company finished its most recent fiscal year on April 29 with a 4 percent gain in revenue but a decline in profit for the second consecutive year.
Struggles in the company's dental division may have led to the move. Jeff Johnson, an analyst with Robert W. Baird & Co., has covered Patterson for 15 years. He said the company's fourth-quarter results reported last week showed the softest dental performance in company history.
"The company has struggled especially in relation to its dental peers," Johnson said. "Putting fresh eyes on a business that should be more consistent and more consistently growing probably seems to make sense from a board perspective."
Anderson, 49, first joined Patterson in 1993 and was named president and CEO in April 2010 and chairman in April 2013.
"It has been my honor to lead this great company over the past seven years and to be a part of its growth story for the past 25 years," he said in a statement. "We have amazing customers and employees, all of whom have very bright futures ahead. I look forward to assisting the board in the transition and watching the company thrive for decades to come."
Anderson will remain on the board until the company's annual meeting, likely in September. According to an SEC filing, Anderson has signed a transition agreement that keeps him on as a non-officer special adviser through July 1, 2019. He will continue to earn an annual salary of $820,000 but won't be eligible for annual bonuses or equity awards. On July 1, 2019, he will also be eligible for a $1.1 million severance payment.
Lead director John Buck will become nonexecutive chairman and will lead the search committee. The board also hired executive search firm Spencer Stuart to help conduct the process.
Patterson, the 15th largest public company in Minnesota, had revenue of $5.6 billion for in its latest fiscal year and a profit of $173.8 million.
Shares of Patterson closed Thursday at $47.13 per share, up almost 7 percent. In the release, the company reiterated its earnings guidance for fiscal 2018. The company expects earnings to be in the $1.90 to $2.05 per share range.
Under Anderson, the company conducted two of its largest deals. In April 2015, it acquired Animal Health International for $1.1 billion, further broadening its presence in the companion and production animal markets. Several months later it sold its medical supply business for $715 million to Madison Dearborn Partners in order to concentrate on its dental and animal health businesses.
"The acquisition of Animal Health International and divestiture of Patterson Medical are transformational moves for Patterson Cos. and a key component of our strategic intent to take a broadened view of our markets," Anderson said in a 2015 release announcing the Patterson Medical divestiture.