HSIC

Business Context and Reporting Period

Company: Henry Schein, Inc.
Filing Type: Form 8-K (Current Report)
Date: April 23, 2018
Event: Announcement of definitive agreements for a Reverse Morris Trust transaction involving the spin-off of the Company's animal health business and its subsequent merger with Direct Vet Marketing, Inc. (d/b/a Vets First Choice).

Key Financial Metrics

This filing is a current report regarding a corporate transaction and does not contain periodic financial statements. Consequently, specific values for revenue, profit, cash flow, margins, debt, and liquidity are not provided in this document.

Material Changes and Transaction Structure

• Transaction Type: Reverse Morris Trust transaction.
• Key Steps:
  1. Henry Schein contributes its animal health business assets to a new subsidiary, HS Spinco, Inc. ("Spinco").
  2. Spinco issues common stock to Henry Schein in exchange for the assets.
  3. Spinco pays a special dividend to Henry Schein and repays intercompany debt.
  4. Henry Schein distributes all Spinco shares to its stockholders.
  5. Immediately following the distribution, a Spinco subsidiary merges with Direct Vet Marketing, Inc. ("DVM").
• Ownership Structure Post-Transaction: On a fully diluted basis, Henry Schein stockholders will own approximately 63% of Spinco, while former DVM stockholders will own approximately 37%.

Guidance, Outlook, and Risks

Outlook: Management anticipates benefits from the transaction, including future financial and operating results, though specific numerical guidance is not included in this filing.

Risks and Contingencies: The filing includes extensive forward-looking statements subject to risks, including:

• Ability to consummate the transaction and obtain requisite approvals.
• Timing of the closing.
• Successful integration of operations and employees.
• Realization of anticipated synergies.
• Impact on relationships with employees, customers, and competitors.
• Retention of key personnel.
• Changes in financial markets, interest rates, and foreign currency exchange rates.

Regulatory Note: Spinco plans to file a registration statement (Form S-1/S-4) containing a prospectus with the SEC. Investors are urged to review these documents for detailed information.

Investor Verification Checklist

• Verify the final ownership percentages (63% Henry Schein stockholders / 37% DVM stockholders) in the upcoming prospectus.
• Review the definitive agreements for specific terms regarding the special dividend and intercompany debt repayment.
• Monitor the status of regulatory approvals required to close the transaction.
• Examine the upcoming Form S-1/S-4 for detailed financial projections and risk factors specific to the combined entity.
• Confirm the timeline for the distribution of Spinco shares to Henry Schein stockholders.