Mars to buy veterinary hospital operator VCA for $7.7 bn
10 January 2017
Mars Inc, the maker of confectionery, pet food, and other food products, yesterday struck a deal to buy veterinary hospital operator VCA Inc for $7.7 billion, in order to expand its share of the $4 billion global pet healthcare market.
Under the terms of the deal that was agreed to by the boards of both the companies, Mars, which owns M&Ms and Snickers as well as the BluePearl chain of emergency and specialty veterinary care clinics, is offering to pay $93 per share, a 31 per cent premium to VCA's closing price on 6 January 2017.
The total deal price is approximately $9.1 billion, including $1.4 billion debt.
Mars, whose global pet care brands that include Royal Canin, Pedigree and Whiskas, said that upon closing, VCA will remain headquartered in Los Angeles, California and operate as a separate business unit within Mars Petcare, alongside its other veterinary services businesses, Banfield Pet Hospital, Bluepearl and Pet Partners.
Founded in 1986, VCA is a leading provider of pet health care services in the country having nearly 800 small animal veterinary hospitals and 60 diagnostic laboratories throughout the US and Canada.
Its diagnostic laboratories include Antech Diagnostics - a nationwide clinical laboratory system that services all 50 states and Canada, Sound - an animal diagnostic imaging company, and Camp Bow Wow – a doggy day-care chain franchise.
The Los Angeles-based company employs 23,000 people and has annual revenue of $2.1 billion.
''VCA is a leader across pet health care and the opportunity we see together - for pets, pet owners, veterinarians and other pet care providers - is tremendous. We have great respect for VCA, with whom we share many common values and a strong commitment to pet care,'' said Mars CEO Grant Reid.
''Joining the Mars family of brands provides significant value to our stockholders while also preserving the company's values and a culture focused on investing in our people and facilities to promote excellence in pet care and long-term growth,'' said VCA CEO Bob Antin.
Virginia-based Mars, known for its candies, is also the world's biggest pet food company with a 25 per cent share of the $71.77 billion global pet food market.
With annual sales of $33 billion, Mars is the 6th largest privately held company in the US and the world's biggest confectionery maker.
The Virginia-based company operates in six business segments: Chocolate, Petcare, Food, Drinks and Symbioscience - the company's life sciences division.
Its well-known confectionery brand include Mars bars, Milky Way Bars, Skittles, Snickers, Twix and M&M's.