Henry Schein enters expanding Turkish market

Oct 26, 2010

Henry Schein has acquired a 50% nonconsolidating interest in Guney Dis Deposu, a full-service dental distribution business headquartered in Istanbul, Turkey, the company announced. The remaining 50% will be held by Ferizan Peker, whose family founded Guney in 1950.

For the past 40 years, Peker has managed Guney, a leader in the 90 million euro ($126 million U.S.) Turkish dental market. Henry Schein expects the transaction to be neutral to 2010 earnings per share and slightly accretive to 2011 earnings per share. Financial terms were not disclosed.

"The Turkish dental market is growing rapidly, at approximately 10% to 12% per year, and our investment in Guney brings to Henry Schein a well-respected, market-leading business with a 60-year history," said Stanley Bergman, chairman and CEO of Henry Schein, in a press release. "This strong history has been supported by a successful distribution model that we expect to maintain in order to continue to drive future sales growth."

Henry Schein sees considerable growth opportunity in Turkey, including focusing on underpenetrated brands and introducing certain new brands and Henry Schein private-label products, Bergman added.

With approximately 70 team members, Guney's operations are supported from a centralized warehouse in Istanbul. For the past 12 months, the company had sales of 17 million euros ($24 million), of which approximately 60% were from dental equipment, 35% from dental consumables and 5% from technical service.

Turkey has about 23,000 dentists, of which more than 60% were in private practice in 2008, Schein noted. In addition, there is a growing trend in aesthetic dentistry, and the government is accelerating its investment in dental and oral care.