Activist hedge fund Ananym Capital Management is preparing to launch a proxy fight at dental and medical distributor Henry Schein, aiming to nominate up to six directors to the company’s board, according to a report by Reuters.
The report cites three sources familiar with the matter as revealing that the hedge fund believes that the $9.3bn company needs new leadership, better cost control, and more strategic capital allocation.
Ananym, co-founded in September by veteran investors Charlie Penner and Alex Silver, is expected to reveal its slate of nominees in the coming weeks, with the candidates set to include executives with expertise in healthcare distribution and business transformation, according to the sources.
Henry Schein’s board currently comprises 13 members, including Chairman and CEO Stanley Bergman, 75, who has served as a director for over 40 years. Five other directors have been on the board for more than a decade.
Ananym has expressed concern over the lack of a clear succession plan for Bergman, arguing that fresh perspectives on the board are needed to address the company’s future leadership. The hedge fund’s dissatisfaction stems from informal talks held late last year that failed to result in meaningful progress.
Ananym, which owns 471,000 shares of Henry Schein — its largest position in a $250m portfolio — has also raised concerns about the company’s operational strategy, believing that its spending is excessive and that its acquisitions have not been adequately integrated.
Ananym has urged the company to shift capital allocation toward stock repurchases, arguing that its shares are undervalued. It also suggests pausing mergers and acquisitions until prior deals yield better results.
The stock has risen about 10% since Ananym’s involvement was first reported by Reuters in November, closing at $74.78 on Wednesday. However, the stock had been largely flat over the previous year.
