Patterson Companies Announces $31.35 Per Share Agreement With Patient Square Capital

Patterson Companies announced that it has entered into a definitive agreement to be acquired by Patient Square Capital (Patient Square), a dedicated healthcare investment firm. Under the terms of the agreement, Patterson shareholders will receive $31.35 in cash per share, representing an approximately 49% premium to Patterson’s 30-calendar-day volume-weighted average price (VWAP) ending December 4, 2024 (the last trading day prior to Patterson announcing the evaluation of strategic alternatives), or a transaction value of approximately $4.1 billion, including the refinancing of Patterson’s receivables facilities.

“Today’s announcement marks an exciting next step in Patterson’s evolution and delivers immediate and certain value for our shareholders while positioning us to continue investing in serving our customers and driving growth,” said Don Zurbay, president and CEO of Patterson. “This transaction follows a review of strategic alternatives by our Board of Directors, with assistance from our independent advisors, maximizing our value and enabling Patterson to continue executing our strategy well into the future.

“Patient Square recognizes the value of our brand and the quality of our world-class team and is grounded in similar values that guide our actions. They share the same long-term vision for our company, which makes them an excellent partner for the next phase of our journey.”

Patient Square managing partner Jim Momtazee said, “I have closely followed Patterson for decades and long admired the value the company provides to partners and customers. Patient Square is excited to work closely with management on the next chapter of growth for the business, building on its long and proud legacy.”

Transaction Details

The company’s Board of Directors, excluding Zurbay given his position as a management director, has unanimously approved the transaction. Consistent with Patterson Companies’ commitment to strong governance practices, Zurbay has recused himself from participating in any deliberations or approvals related to the transaction.

The transaction will be financed through a combination of committed equity financing provided by Patient Square Equity Partners, LP, as well as committed debt financing to be led by Citi, UBS Investment Bank, and Wells Fargo Bank N.A.

The transaction is expected to close in the fourth quarter of Patterson’s fiscal 2025, subject to the receipt of shareholder approval, regulatory approvals, and the satisfaction of other customary closing conditions. 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.

Upon completion of the transaction, Patterson will become a privately held company, and its common stock will no longer be traded on the NASDAQ Global Select Market (Nasdaq). Patterson will maintain its headquarters in St. Paul, Minnesota.

Advisors

Guggenheim Securities, LLC, is acting as the exclusive financial advisor to Patterson, and Taft Stettinius & Hollister LLP is serving as legal counsel to Patterson. Citi, UBS Investment Bank, and Wells Fargo Securities, LLC, are serving as financial advisors, and Kirkland & Ellis LLP and Greenberg Traurig, LLP, are acting as legal counsel to Patient Square.

About Patterson Companies, Inc.

Patterson Companies, Inc. (Nasdaq: PDCO), connects dental and animal health customers in North America and the U.K. to the latest products, technologies, services, and innovative business solutions that enable operational and professional success. Our comprehensive portfolio, distribution network, and supply chain are equaled only by our dedicated, knowledgeable people who deliver unrivaled expertise and unmatched customer service and support.

About Patient Square Capital

Patient Square Capital is a dedicated healthcare investment firm with approximately $11 billion in assets under management as of September 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. Patient Square utilizes deep industry expertise, a broad network of relationships, and a partnership approach to make investments in companies that will grow and thrive. Patient Square invests in businesses that strive to improve patient lives, strengthen communities, and create a healthier world. For more information, visit www.patientsquarecapital.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains statements that are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include information concerning the proposed merger (“Merger”) with Paradigm Parent, LLC, a Delaware limited liability company (“Parent”), and Paradigm Merger Sub, Inc., a Minnesota corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and the ability to consummate the proposed Merger, our liquidity, and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as “believe,” “expect,” “project,” “potential,” “anticipate,” “intend,” “plan,” “estimate,” “seek,” “will,” “may,” “would,” “should,” “could,” “forecasts,” or similar words.

These statements are based on certain assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments, and other factors we believe are appropriate in these circumstances. We believe these assumptions are reasonable, but you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent releases or reports.

These statements involve risks, estimates, assumptions, and uncertainties that could cause actual results to differ materially from those expressed in these statements and elsewhere in this press release. These uncertainties include, but are not limited to, the inability to consummate the Merger within the anticipated time period, or at all, due to any reason, including the failure to obtain required regulatory approvals, satisfy the other conditions to the consummation of the Merger, or complete necessary financing arrangements; the risk that the Merger disrupts our current plans and operations or diverts management’s attention from its ongoing business; the effects of the Merger on our business, operating results, and ability to retain and hire key personnel and maintain relationships with customers, suppliers, and others with whom we do business; the risk that our stock price may decline significantly if the Merger is not consummated; and the nature, cost, and outcome of any legal proceedings related to the Merger.

Additional risks include dependence on suppliers to manufacture and supply substantially all of the products we sell, potential disruption of distribution capabilities, changes in demand due to political, economic, and regulatory influences, and exposure to litigation and government inquiries.

The foregoing review of important factors should not be construed as exhaustive. The information contained in this press release is made only as of the date hereof, even if subsequently made available on our website or otherwise.

Additional Information and Where to Find It

This press release relates to the proposed Merger. Parent and Merger Sub are indirect subsidiaries of funds managed and advised by Patient Square Capital. A special meeting of the shareholders of Patterson will be announced as promptly as practicable to seek shareholder approval in connection with the proposed Merger. We expect to file with the SEC a proxy statement and other relevant documents in connection with the proposed Merger. Shareholders of Patterson are urged to read the definitive proxy statement and other relevant materials filed with the SEC when they become available because they will contain important information about Patterson, Parent, Merger Sub and the Merger. Shareholders may obtain a free copy of these materials (when they are available) and other documents we file with the SEC at the SEC’s website at www.sec.gov, at our website at www.pattersoncompanies.com or by sending a written request to our Corporate Secretary at our principal executive offices at 1031 Mendota Heights Road, St. Paul, Minnesota 55120.

Participants in the Solicitation

Patterson, its directors and certain of its executive officers and employees may be deemed to be participants in soliciting proxies from its shareholders in connection with the Merger. Information regarding the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of our shareholders in connection with the Merger and any direct or indirect interests they have in the Merger will be set forth in Patterson’s definitive proxy statement for its special shareholder meeting when it is filed with the SEC. Information relating to the foregoing can also be found our Annual Report on Form 10-K for the year ended April 27, 2024 filed with the SEC on June 18, 2024 and our definitive proxy statement for our 2024 annual meeting of shareholders filed with the SEC on August 2, 2024 and our recent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. To the extent that holdings of Patterson’s securities have changed since the amounts set forth in our definitive proxy statement for our 2024 annual meeting of shareholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC.

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