Henry Schein in Canadian expansion
"While we already have a Canadian presence and market, we were selling there more as an exporter," vice president and chief financial officer Steven Paladino said.
"The acquisition of Arcona allows us to have a physical operation in Canada with two distribution centers, and to provide better service with shorter delivery times."
Canada, he added is "a complimentary market for us. Canadians are used to direct marketing and telesales, the two main components of our business.
"Using direct marketing methods to sell our product means lower costs, savings we can pass on to customers. General practitioners and dentists in Canada are under growing pressure to cut costs, and are therefore more likely to turn to a low-cost provider like us."
A Canadian presence will also help sales, Paladino said, because "doctors seem to prefer buying from a local rather than an American source;" so will quick delivery and plans to promote wide product selection.
The acquisition will add 76 sales consultants, 40 service technicians, 9 sales centers and 2 distribution centers to Henry Schein's Canadian operations.
One reason for Henry Schein's decision to merge with Arcona, instead of one of Canada's other drugs distributors, was the two companies similar management styles and cultures.
"Arcona and Henry Schein share a similar vision for creating a value-added distributor and our philosophies regarding our team members, customers and other business partners are very similar," chairman and CEO of Arcona Health, Joseph Robertson said.
"We are extremely excited about merging Arcona Health with our Canadian operation and believe it will create a superior business partnership," Henry Schein's chairman and CEO, Stanley Bergman said.
Robertson, who has been in his present position for over ten years, will take on the role of president for the combined company.
Henry Schein is one of the world's largest distributors of healthcare products to office-based healthcare practitioners, including dental practices and laboratories, physician practices and veterinary clinics.
The company services more than 250,000 customers worldwide.
Arcona Health, based in Ontario and British Columbia, had sales of US$32 million in 1997, a growth of 30 percent over the last five years. Profit Magazine rated it as one of Canada's 100 fastest growing firms.
The merged company will be known as Henry Schein Arcona Inc.