In an interview with CNBC, Henry Schein CEO Stanley Bergman said, “It’s all about growth and it’s all about unlocking shareholder value.” Added Ben Shaw, CEO of Vets First Choice: “This is about helping veterinarians respond to changing client expectations.”
Henry Schein Animal Health, a long established distributor of supplies to veterinary clinics, is spinning off its animal-health division, which will merge with relative newcomer Vets First Choice to create a new entity, Vets First Corp. The move continues a trend in consolidation in the veterinary sphere that shows no sign of let-up.
In an announcement of the transaction today, Vets First Choice said the new company “will harness insights and analytics to provide pro-active prescription management.”
Vets First Choice positioned itself as a means for veterinarians in private practice to compete with internet vendors of pet medications. The company functions as a virtual in-house pharmacy for participating animal hospitals, of which it has more than 5,100, according to the news release.
Although Henry Schein Inc. will shed its animal health unit to create the new company, Schein will remain close: Its shareholders will own about 63 percent of Vets First Corp. Vets First Choice shareholders will own the remainder. (Vets First Choice is a privately held company, while Vets First Corp. will be public.)
Stanley Bergman, chairperson and CEO of Henry Schein Inc., will serve on the board of Vets First Corp. Ben Shaw, CEO of Vets First Choice, will become CEO of Vets First Corp.
Shaw is the son of David Shaw, who founded Idexx Laboratories, one of the two largest veterinary diagnostic laboratories in the country. The elder Shaw also is involved in the new venture: Currently board chairperson of Vets First Choice, David Shaw is slated to be chairperson of Vets First Corp.
Vets First Corp. will be headquartered in Portland, Maine, the same location as Vets First Choice. (Idexx headquarters is about seven miles away in Westbrook, Maine.)
Henry Schein, based in Melville, New York, on Long Island, is an international conglomerate that deals in medical and dental, as well as veterinary, supplies and services. Schein has been publicly traded since 1995.
The company has expanded broadly over the years. In 2009, it merged with Butler Animal Health Supply LLC, which at the time was one of the country's four largest veterinary suppliers. Schein also acquired several practice-management-software companies and gained a controlling share of VetStreet, a client-communication and veterinary-data-warehousing company
Today, Schein counts among its active customers about 75 percent of veterinarians in the United States and 70 percent of veterinarians in Europe, Australia and New Zealand. In addition, the company said, more than half of U.S. veterinary practices use its practice-management software platform.
Vets First Choice has expanded likewise. In 2015, it collaborated with VetData on a joint venture called CareConnect LLC. According to a news release, the aim of the venture was "to commercialize a portfolio of innovative veterinary practice workflow applications ... [by] leverag[ing] shared technical resources and commercial operations to launch ... solutions designed to improve practice efficiency and enhance patient care. Initial efforts will focus on prescription management solutions, practice bookkeeping services, and practice analytics."
In 2017, Vets First Choice's parent company, Direct Vet Marketing, bought two players in the compounding-pharmacy realm: Roadrunner Pharmacy and Atlas Pharmaceuticals.
Although consolidation of veterinary-related businesses is not new, the pace appears to be quickening and the stakes, rising. Last year, Mars Inc., owner of Banfield Pet Hospital, the largest veterinary chain in the world, bought VCA Inc., the world's second-largest veterinary clinic brand. Through the VCA acquisition, Mars now owns Antech Diagnostics, Idexx’s chief rival among veterinary laboratories.
Schein and Vets First Choice expect their merger to be completed by the end of the year.
Correction: This article has been revised to correct information about the origins of Vets First Choice. Although the company maintains that David and Ben Shaw cofounded Vets First Choice in 2010, the launch of the business predates their involvement. For details, click here.
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