Henry Schein 2009 Annual Report Download - page 114

HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(In thousands, except share and per share data)
102
Note 18 – Subsequent Events
We have evaluated subsequent events through February 23, 2010, the date that we filed our Annual
Report on Form 10-K for the year ended December 26, 2009 with the Securities and Exchange
Commission. With the exception of the item listed below, there have been no other subsequent events
after December 26, 2009 for which disclosure is required.
Butler Animal Health
Effective December 31, 2009, we acquired a majority interest in Butler Animal Health Supply, LLC
(“BAHS”), a distributor of companion animal health supplies to veterinarians. BAHS further
complements our domestic and international animal health operations. We and certain of our subsidiaries
contributed certain assets and liabilities with a net book value of approximately $91.6 million, related to
our United States animal health business to BAHS and paid approximately $43.5 million in cash to acquire
50.1% of the equity interests in Butler Animal Health Holding Company LLC (“Butler Holding”)
indirectly through W.A. Butler Company, a holding company that will be jointly owned with Oak Hill
Capital Partners (“OHCP”). As part of a recapitalization at closing, BAHS incurred approximately $320.0
million in debt, which will be reflected on our consolidated balance sheet. The owners of BAHS received
a total of approximately $170.5 million in cash from the transaction with us and the recapitalization. As of
February 23, 2010, the date of issuance of this report, we are in the process of calculating the allocation of
purchase price to assets acquired and liabilities assumed, as well as valuations for goodwill and other
intangible assets.
In connection with the acquisition of a majority interest in BAHS, we entered into (i) a Put Rights
Agreement with OHCP and Butler Holding (the “Oak Hill Put Rights Agreement”), and (ii) a Put Rights
Agreement with Burns Veterinary Supply, Inc. (“Burns”) and Butler Holding (the “Burns Put Rights
Agreement” and together with the Oak Hill Put Rights Agreement, the “Put Rights Agreements”), which
provide each of OHCP and Burns with certain rights to require us to purchase their respective direct and
indirect ownership interests in Butler Holding at fair value based on third-party valuations (“Put Rights”).
Pursuant to the Oak Hill Put Rights Agreement, OHCP can exercise its Put Rights from and after the
earlier of (a) the first anniversary of the closing, and (b) a change of control of us. Except in connection
with a change of control of us prior to the first anniversary of the closing (in which case there will not be
any maximum), our maximum annual payment to OHCP under the Oak Hill Put Rights Agreement will
not exceed $125.0 million for the first year during which OHCP can exercise its rights, $137.5 million for
the second year and $150.0 million for the third year and for each year thereafter. Pursuant to the Burns
Put Rights Agreement, Burns can exercise its Put Rights from and after the fifth anniversary of the closing
of the acquisition, at which time Burns will be permitted to sell to us up to 20%, based on fair value, of its
ownership interest in Butler Holding, which ownership interest will be measured as of the date of the
closing of the acquisition. If OHCP still owns ownership interests in Butler Holding at the time the Burns
Put Rights begin, then the put amounts payable by us to OHCP and Burns in any year will not exceed
$150.0 million in the aggregate.