Form 4: KKR Takes Significant Stake in Henry Schein via Swap

KKR Group Partnership L.P. and its affiliates entered into an equity swap for 1.87 million Henry Schein shares, signaling a substantial investment.

Summary

• KKR Hawaii Aggregator L.P., an affiliate of KKR Group Partnership L.P., entered into a total return swap with a third-party financial counterparty.
• The swap covers 1,874,538 notional shares of Henry Schein Inc. (HSIC) Common Stock.
• The notional price per share for the swap was determined to be $66.19.
• The initial hedge period for the swap was completed on August 12, 2025.
• Under the swap, KKR Hawaii Aggregator L.P. has the right to acquire, and the counterparty has the obligation to deliver, the 1,874,538 shares of Common Stock.
• Upon acquisition and settlement, these shares would be directly held by KKR Hawaii Aggregator L.P.
• The swap has an exercisable date of August 13, 2025, and an expiration date of July 16, 2027.
• Multiple KKR entities, including KKR Group Partnership L.P., KKR Group Holdings Corp., KKR Group Co. Inc., KKR & Co. Inc., KKR Management LLP, and founding partners Henry R. Kravis and George R. Roberts, are listed as reporting persons due to their indirect beneficial ownership through a complex corporate structure.
• The reporting persons disclaim beneficial ownership of the securities except to the extent of their pecuniary interest therein.

Sentiment

Score: 7

Explanation: The filing indicates a significant strategic investment by KKR, a prominent global investment firm, in Henry Schein. This suggests confidence in Henry Schein's value and future, which is generally a positive signal for the company and its shareholders.

Positives

• A significant investment by a major private equity firm like KKR in Henry Schein Inc. can be interpreted as a vote of confidence in the company's future prospects and valuation.
• The structured nature of the equity swap allows KKR to gain economic exposure to Henry Schein shares while potentially managing immediate capital outlay or market impact.

Risks

• The equity swap creates an obligation for KKR Hawaii Aggregator L.P. to purchase 1,874,538 shares of Common Stock, which represents a future financial commitment.
• The reporting persons disclaim beneficial ownership of the securities except to the extent of their pecuniary interest, indicating a complex ownership structure that may require careful interpretation for full transparency.

Future Outlook

The equity swap has an expiration date of July 16, 2027, indicating a future period during which the obligation to purchase the underlying shares is active. The acquisition and settlement of the shares by KKR Hawaii Aggregator L.P. are future actions implied by the swap agreement.

Industry Context

Henry Schein Inc. is a global distributor of healthcare products and services, primarily to dental and medical practitioners. KKR's significant stake, acquired through an equity swap, positions a major global investment firm with substantial influence as a 10% owner in a leading player within the healthcare distribution sector. This move suggests KKR's strategic interest in the long-term value of the healthcare supply chain.

Related Party Transactions

• The filing details a complex hierarchical structure of KKR entities (e.g., KKR Hawaii Aggregator L.P., KKR Hawaii Aggregator GP LLC, KKR North America Fund XIII SCSp, KKR Group Partnership L.P., KKR & Co. Inc.) through which beneficial ownership is attributed to the various reporting persons, including Henry R. Kravis and George R. Roberts. This illustrates the internal related party relationships within the KKR group for the purpose of this transaction.

Stakeholder Impact

• Shareholders of Henry Schein Inc. may view KKR's significant stake as a positive indicator of the company's value and potential for future growth, potentially influencing investor sentiment.
• The presence of a major institutional investor like KKR as a 10% owner could lead to increased scrutiny or influence over Henry Schein's strategic decisions and corporate governance.

Next Steps

• Acquisition and settlement of the 1,874,538 shares of Common Stock by KKR Hawaii Aggregator L.P. from the third-party financial counterparty, as per the terms of the equity swap.

Key Dates

Keywords

Henry Schein, HSIC, KKR, Equity Swap, Beneficial Ownership, SEC Form 4, Insider Transaction, Investment, Healthcare Distribution, Dental Supply, Medical Supply