NEW YORK, March 30, 2018 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Patterson Companies, Inc. (“Patterson” or the “Company”) (NASDAQ:PDCO) in the United States District Court for the District of Minnesota on behalf of a proposed class consisting of investors who purchased or otherwise acquired common stock of Patterson Companies between June 26, 2015 and February 28, 2018, inclusive (the “Class Period”), seeking to recover compensable damages caused by Defendants’ violations of the Securities Exchange Act of 1934.
The Complaint alleges that Patterson, along with its two largest competitors, Henry Schein, Inc. (“Schein”) and Benco Dental Supply Co. (“Benco”), controls 85% of all distributor sales of dental products and services in the United States—a $10 billion market – with Patterson alone controlling 33% of the market. The Complaint also alleges that during the Class Period, in order to maintain control of that market, and prop-up their margins and profitability, Defendants colluded with their competitors, Schein and Benco, to fix the prices of dental supply products that their companies sold to buying groups or group purchasing organizations (“GPOs”) that represented small and individual dental practices. The Complaint further alleges that with this fraudulent scheme in place, Patterson enjoyed years of profitability and without disclosing the truth, Patterson’s public filings falsely maintained throughout the Class Period that the Company’s financial results were accurate, and that the Company differentiated itself from the competition through “competitive pricing.”
The Complaint alleges that the truth behind Patterson’s growth emerged on February 12, 2018, when the FTC filed an administrative complaint against Patterson, Schein and Benco, alleging that from at least February 2013, these companies had been engaging in a conspiracy to fix the prices of dental supply products and refused to sell to GPOs in violation of U.S. antitrust laws.
The Complaint also alleges that on March 1, 2018, before the markets opened, Patterson announced its quarterly earnings data for the third quarter of fiscal 2018. The Complaint alleges that because its price-fixing scheme now was under scrutiny, the Company shocked investors by announcing a 26% decrease in earnings which also missed consensus expectations, and that its Chief Financial Officer, Ann Gugino, was stepping down. Patterson blamed its dismal results on “changes in the Company’s sales organization” and “disruptions in its sales force.” As a result, the Company was forced to cut full year guidance for the second quarter in a row. On this news, Patterson’s stock price declined precipitously, dropping $7.48 per share or 23% in one day, on trading volume of more than 15 million shares, injuring investors.
Investors who purchased or otherwise acquired shares during the Class Period should contact the Firm prior to the May 29, 2018 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.