Dentsply, Sirona ink $5.6B, all-stock merger-of-equals

Dentsply International (NSDQ:XRAY) and Sirona Dental Systems (NSDQ:SIRO) yesterday said they plan to merge in an all-stock union of equals worth about $5.56 billion, creating the world’s largest dental equipment maker.

The deal calls for Sirona shareholders to receive 1.8142 XRAY shares for each SIRO share they own. At roughly $98.06 apiece, that’s about a 0.7% discount on Sirona’s $99.31 closing price yesterday. The stock slid -4.3% to $95 even in pre-market activity today; XRAY shares were down -3.4% to $52.48 before the bell today.

The combined company, Dentsply Sirona, is slated to trade on the NASDAQ exchange under the XRAY symbol after the deal’s expected close during the 1st quarter next year, the companies said. At that point Dentsply shareholders will own 58% of the new entity, with Sirona shareholders owning the rest. Dentsply Sirona’s global headquarters will be in York, Pa., with international HQ in Salzburg, Austria, they said.

Sirona president & CEO Jeffrey Slovin was named CEO of the new dental giant, with Dentsply chairman & CEO Bret Wise as executive chairman. Dentsply president & CFO Christopher Clark was named president & COO, Technologies, with executive VP & COO James Mosch as president & COO of dental & healthcare consumables. Sirona’s CFO, Ulrich Michel, was tapped for executive vice president & CFO at Dentsply Sirona.

“We are excited about bringing together 2 industry leaders,” Wise said in prepared remarks. “Dentsply Sirona will offer a comprehensive line of solutions to more effectively meet the needs of dental customers all over the world and advance patient care. With a strong financial profile, comprehensive product offerings and integrated solutions,Dentsply Sirona will be uniquely positioned to deliver attractive returns for our shareholders and make dentistry better, faster and safer around the world. I look forward to working with Jeff and the combined management team to deliver on this mission.”

“This is an exciting day for both companies, for the dental community and for patients around the globe. We are bringing together 2 world-class companies that share a culture of innovation and will foster the development of differentiated, integrated solutions for general practitioners and specialists, particularly in the highest growth segments of the dental industry. Combining Sirona’s proven digital solutions and equipment with Dentsply’s leading consumables platform creates the most comprehensive dental solutions offering available to meet customer demand in every key segment. I look forward to leading the talented teams of both Sirona and Dentsply as we drive the global digitization of dentistry, offer superior solutions to customers and patients and create The Dental Solutions Company,” Slovin added.

The deal is forecast to deliver more than $125 million in pre-tax annualized synergies by the 3rd year, the companies said.

“There is a convergence now of consumables and technologies in the dental space. With the 2 of them together, Dentsply and Sirona can become even more relevant to dentists across their product needs,” said Jon Santemma, global head of healthcare investment banking at Jefferies, which advised Sirona on the deal.

Material from Reuters was used in this report.

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