Patterson Companies, Inc. (Nasdaq: PDCO) today announced that it has
closed on $525 million of long-term debt financing and the repurchase of
approximately 6.3 million shares of its common stock from J.P. Morgan
Chase Bank, N.A. under an accelerated share repurchase (ASR) agreement.
Patterson issued $450 million of fixed-rate private notes with
maturities of five, seven and ten years. The company also secured a
five-year, $75 million term loan at a floating rate of interest through
a group of banks. Patterson used $250 million of the debt financing to
repurchase shares under the ASR. The remaining proceeds from the debt
issuances will be used to repay borrowings under the company’s
revolving credit agreement and for general corporate purposes. At
closing, the weighted average interest rate of the debt was 5.1%.
As a result of the ASR transaction and open-market purchases made since
late November 2007, Patterson has now repurchased approximately 18
million shares under its previously announced 25 million share
repurchase authorization.
James W. Wiltz, president and chief executive officer, commented: “Through
this capital restructuring, we leveraged the strength of our balance
sheet to create what we believe will be long-term value for our
shareholders.”
The final number of shares to be delivered by J.P. Morgan under the ASR
will depend on prevailing market conditions and is based on the
difference between the initial purchase price per share and a volume
weighted average price of the company's common stock, minus a set
discount, during a period of up to six months. Under terms of the ASR,
the company may receive additional shares of common stock from J.P.
Morgan or may be required to deliver shares or cash to J.P. Morgan.
About Patterson Companies, Inc.
Patterson Companies, Inc. is a value-added distributor serving the
dental, companion-pet veterinarian and rehabilitation supply markets.
Dental Market
As Patterson’s largest business, Patterson
Dental provides a virtually complete range of consumable dental
products, equipment and software, turnkey digital solutions and
value-added services to dentists and dental laboratories throughout
North America.
Veterinary Market
Webster Veterinary is the nation’s second
largest distributor of consumable veterinary supplies, equipment and
software, diagnostic products, vaccines and pharmaceuticals to
companion-pet veterinary clinics.
Rehabilitation Market
Patterson Medical is the world’s leading
distributor of rehabilitation supplies and non-wheelchair assistive
patient products to the physical and occupational therapy markets. The
unit’s global customer base includes
hospitals, long-term care facilities, clinics and dealers.
This release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are information of a non-historical nature and are subject to
risks and uncertainties that are beyond the Company’s
ability to control. The Company cautions shareholders and prospective
investors that the following factors, among others, may cause actual
results to differ materially from those indicated by the forward-looking
statements: competition within the dental, veterinary, and
rehabilitative and assistive living supply industries; changes in the
economics of dentistry, including reduced growth in expenditures by
private dental insurance plans, the effects of economic conditions and
the effects of healthcare reform, which may affect future per capita
expenditures for dental services and the ability and willingness of
dentists to invest in high-technology products; the effects of
healthcare related legislation and regulation which may affect
expenditures or reimbursements for rehabilitative and assistive
products; changes in the economics of the veterinary supply market,
including reduced growth in per capita expenditures for veterinary
services and reduced growth in the number of households owning pets; the
ability of the Company to maintain satisfactory relationships with its
sales force; unforeseen operating risks; risks associated with the
dependence on manufacturers of the Company’s
products; and the ability of the Company to successfully integrate the
recent acquisitions into its existing business. Forward-looking
statements are qualified in their entirety by the cautionary language
set forth in the Company's filings with the Securities and Exchange
Commission, including its Form 10-K for fiscal year 2007.
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