Form 4: KKR Affiliate Enters $25.7M Equity Swap for Henry Schein Shares

KKR Hawaii Aggregator L.P. has entered into a total return swap to acquire 350,430 notional shares of Henry Schein Inc. common stock at a notional price of $73.40 per share.

Summary

• KKR Hawaii Aggregator L.P. entered into a total return swap (the "Swap") with a third-party financial counterparty on December 4, 2025.
• On December 5, 2025, the initial hedge period was completed, setting the notional shares covered by the Swap at 350,430 shares of Henry Schein Inc. Common Stock.
• The notional price per share was determined to be $73.40, valuing the notional position at approximately $25.71 million.
• Pursuant to the Swap, KKR Hawaii Aggregator L.P. has the right to acquire, and the counterparty has the obligation to deliver, these 350,430 shares.
• The transaction was made pursuant to a Rule 10b5-1(c) plan, indicating a pre-arranged trading strategy.
• Multiple KKR entities are listed as reporting persons, including KKR Hawaii Aggregator GP LLC, KKR North America Fund XIII SCSp, KKR Associates North America XIII SCSp, KKR North America XIII S.a r.l., and KKR North America XIII Holdings Ltd, all of whom disclaim beneficial ownership except for their pecuniary interest.

Sentiment

Score: 7

Explanation: The filing indicates a significant strategic investment by KKR in Henry Schein Inc. through an equity swap, suggesting confidence in the company. While it's a disclosure of a transaction rather than performance, the nature of the investment by a prominent firm is generally viewed positively for the underlying company.

Positives

• A significant investment by a major private equity firm (KKR) in Henry Schein Inc. through an equity swap, potentially signaling confidence in the company's future prospects.
• The transaction was executed under a Rule 10b5-1(c) plan, indicating a pre-planned and structured investment strategy rather than an opportunistic trade.

Future Outlook

The filing does not provide explicit forward-looking statements or guidance from Henry Schein Inc. or KKR regarding future performance or strategy, beyond the future dates related to the swap's exercisability and expiration.

Management Comments

• Each of the Reporting Persons disclaims beneficial ownership of the securities reported herein, except to the extent of such Reporting Person's pecuniary interest therein.
• The filing of this statement shall not be deemed to be an admission that, for purposes of Section 16 of the Securities Exchange Act of 1934 or otherwise, the Reporting Persons are the beneficial owners of any securities reported herein.

Industry Context

This transaction represents a strategic investment by a major private equity firm, KKR, into a publicly traded healthcare products and services company, Henry Schein Inc. Such investments often reflect a long-term bullish view on the target company's sector or specific business model, potentially indicating KKR's confidence in the dental, medical, and animal health markets served by Henry Schein.

Comparison to Industry Standards

• The use of an equity swap by a large institutional investor like KKR is a common financial instrument for gaining economic exposure to a company's stock without immediate direct ownership, often for hedging or strategic investment purposes.
• Similar transactions are seen with other private equity firms or hedge funds taking positions in healthcare distribution companies, such as those involving Cardinal Health or McKesson, where large institutional investors might use derivatives to manage exposure or build positions.
• The notional value of approximately $25.7 million represents a significant, though not overwhelming, position for a firm of KKR's size, suggesting a strategic stake rather than a full takeover attempt.

Related Party Transactions

• The filing details a complex web of KKR entities (KKR Hawaii Aggregator L.P., KKR Hawaii Aggregator GP LLC, KKR North America Fund XIII SCSp, KKR Associates North America XIII SCSp, KKR North America XIII S.a r.l., KKR North America XIII Holdings Ltd) as reporting persons, indicating an internal KKR group structure for this investment. The swap itself is with a "third-party financial counterparty."

Stakeholder Impact

• Shareholders: May view KKR's significant investment as a vote of confidence, potentially leading to increased investor interest or stability in the stock.
• Company Management: KKR's role as a 10% owner and having a director relationship suggests potential for increased oversight or strategic influence.

Next Steps

• KKR Hawaii Aggregator L.P. has the right to acquire the 350,430 shares of Common Stock upon settlement of the swap.
• The equity swap has an expiration date of July 16, 2027.

Key Dates

Recommendation

The filing indicates a strategic investment by KKR, a sophisticated institutional investor, in Henry Schein Inc. This suggests a positive long-term view on the company. However, as a Form 4, it primarily discloses a transaction rather than providing new operational or financial performance data. While the investment is a positive signal, it doesn't fundamentally alter the company's immediate operational outlook or valuation metrics to warrant a 'buy' or 'strong buy' based solely on this filing. Investors currently holding Henry Schein shares may find this as a reaffirmation of their position, while new investors would need to conduct further due diligence beyond this transaction disclosure.

Keywords

Henry Schein Inc., HSIC, KKR, Equity Swap, Total Return Swap, Insider Transaction, Form 4, Beneficial Ownership, Investment, Private Equity