EXHIBIT 99.1
Patterson Dental Company Acquires Third Largest
Distributor Serving $1.5 Billion Companion Pet Veterinary Supply Market
Acquisition of Regional Leader J. A. Webster, Inc. Provides Patterson
With Platform for Profitable Growth in Fragmented National Market
July 9, 2001--St. Paul, MN--Patterson Dental Company (Nasdaq NMS: PDCO) today
announced that it has acquired certain assets of J. A. Webster, Inc., the
leading distributor of veterinary supplies to companion pet (dogs, cats and
other common household pets) veterinary clinics in the eastern United States and
the third largest nationally. The purchase price of $92.5 million includes cash
and stock, plus potential additional cash payments over five years.
To be operated as a wholly-owned subsidiary under current management, the
acquisition is expected to be immediately accretive and contribute approximately
$.03 to $.04 per diluted share to the Company's consolidated fiscal 2002
earnings.
Webster's net sales increased 12% to approximately $150,000,000 in the year
ended December 31, 2000. By comparison, the companion pet veterinary supply
market is growing at an estimated annual rate of 6% to 7%.
Founded in 1946 and headquartered in Sterling, Massachusetts, Webster has
developed a strong regional brand identity as a value-added, full-service
distributor of a virtually complete range of consumable supplies, equipment,
diagnostic supplies, biologicals (vaccines) and pharmaceuticals. Webster is not
involved with the low-margin distribution of pet foods. Webster's offerings,
totaling more than 8,000 products, are sold by over 70 field representatives and
more than 70 telesales representatives.
Peter L. Frechette, president and chief executive officer, commented: "In J. A.
Webster, Patterson has acquired a strongly growing and highly profitable
distributor that represents an excellent strategic fit with Patterson's core
competencies in value-added distribution. Growing our dental supply business
remains our number one priority, but Webster will enable Patterson to capitalize
upon a significant parallel growth opportunity. In effect, Webster will
spearhead our efforts to build the leading national position in the fragmented
companion pet veterinary supply market. By leveraging Patterson's existing
national distribution network, we are positioned to implement a growth strategy
without significant new investments in physical infrastructure. As a result, we
expect to realize improved operating leverage and efficiencies going forward. In
addition, we see significant opportunities for enriching Webster's product mix
with additional Patterson offerings."
Frechette continued: "We view Webster as the ideal vehicle for this growth
strategy due to the striking similarities between the two companies. Both
companies serve large, fragmented markets with similar growth and customer
characteristics. We share a deeply ingrained sales culture that emphasizes
customer relationships and unparalleled customer service. In addition, we have
successfully executed customer-driven, value-added strategies, enabling
Patterson and Webster to grow substantially faster than their respective
markets. For these reasons, we believe the addition of Webster will considerably
strengthen Patterson's long-term prospects for profitable growth."
Jeff H. Webster, who will continue as president of J. A. Webster, said, "We are
extremely pleased to have the opportunity to join forces with a company of
Patterson's quality, reputation and strength. The resources that become
available to us through this partnership with Patterson will accelerate our
ability to achieve our business goals. Reflecting the compatible nature of our
distribution operations, culture and markets, we believe the integration of
Webster into Patterson should proceed smoothly and efficiently. We also look
forward to capitalizing on attractive opportunities for expanding our presence
in the national veterinary supply market."
The companion pet segment is the fastest growing area of the overall U.S.
veterinary supply market. The Company believes this growth is sustainable due to
the steadily expanding number of households with companion pets, new therapeutic
products and services, and the willingness of pet owners to spend more for
veterinary treatments and products. The companion pet segment accounts for
approximately 75%, or nearly 17,000, of the total number of U.S. veterinary
practices in the U.S. Within its targeted geographic markets in the eastern
U.S., Webster serves more than 10,000 veterinary practices.
About Patterson Dental Company
Patterson Dental Company is a value-added distributor of a virtually complete
range of dental products, equipment and services to dentists, dental
laboratories, institutions and other healthcare providers throughout North
America. The Company provides consumable dental supplies, equipment and practice
management software, as well as a full complement of value-added dental services
that include automated inventory management, emergency equipment repair,
equipment financing and office design. Patterson Dental has the largest direct
sales force in the industry, totaling more than 1,000 sales representatives and
equipment/ software specialists serving the United States and Canada.
# # #
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 may be affected by risks and
uncertainties which are inherent in Webster's business and beyond its ability to
control. Such risks and uncertainties could cause actual results and
developments to differ materially from those anticipated. These risks and
unceratinties include, but are not limited to, competitive pressures from other
distributors and Webster's ability to retain customers, maintain supplier
relationships and preserve relationships with sales personnel. In addition,
these forward-looking statements are qualified in their entirety by the
cautionary language contained in the Company's filings with the Securities and
Exchange Commission.
For additional information contact:
- -----------------------------------
R. Stephen Armstrong
Executive Vice President & CFO
651-686-1600
Richard G. Cinquina
Equity Market Partners
612/338-0810
Visit our web site at www.pattersondental.com.
-----------------------