Mars expands its international veterinary practice ownership

Pet-care giant makes forays in Japan, Brazil; adds to holdings in UK

Published: September 27, 2019
By By Ross Kelly and Edie Lau

Mars Inc.'s pet-care segment has entered veterinary clinic markets in Japan and Brazil, and revamped its management structure to reflect its rapidly growing stable of veterinary properties and services around the world.

The biggest U.S. veterinary company also has expanded its presence in the United Kingdom by acquiring another practice group there, even as local competitor CVS rethinks an aggressive growth strategy in Britain amid a shortage of veterinarians there.

Doug Drew, president of Mars Veterinary Health North America, told the VIN News Service that the company's VCA group recently acquired three practices in Japan and is considering more in that country. He said VCA now also has a stake in Brazil: It's a 50% shareholder of Pet Care Central Veterinario S.A., which owns five practices.

In Britain, Mars, through its Linnaeus group, has acquired Blacks Vets, a small animal practice in England, bringing its U.K. practice count to 148. Blacks has a 24-hour hospital in Dudley, and sites in Lye, Oldbury, Sedgley and Quinton.

Mars also has amassed a presence on the European mainland with last year's purchase of Sweden-based AniCura, which has 270 clinics across the continent.

Headquartered in McLean, Virginia, Mars is a privately held company founded more than a century ago in the U.S. as a candymaker.

Mars-owned practice groups tally

Sources: Mars Veterinary Health; Linnaeus

Mars Petcare, a company segment that makes pet foods and other pet-related products and services, this month formally created a Mars Veterinary Health division. The division has two units: Mars Veterinary Health North America, headed by Drew; and Mars Veterinary Health International and Diagnostics, headed by Alejandro Bernal.

Under the reorganization, Antech Diagnostics, one of the largest veterinary laboratories in North America; and Sound, a major purveyor of veterinary diagnostic equipment, have been shifted from VCA to the international unit, reflecting Mars' intention to grow its diagnostic services internationally, said Drew, formerly an executive at VCA.

Drew said the VCA-owned or part-owned practices in Japan and Brazil are part of the North America unit because the relationships were forged by VCA.

VCA itself has a new leader, Dr. Todd Lavender. VCA's former president and CEO, Bob Antin, remains with Mars as a consultant, Drew said.

Today, one of Mars Petcare's biggest competitors in the U.K., publicly traded CVS Group, reported a 17% fall in annual profit to £11.7m (US$14.4 million) after acquisition and employment costs offset a 24% rise in revenue.

CVS said it acquired 34 practices operating as 26 businesses during its financial year ending June 30; only two of those businesses were acquired in 2019.

"The group is focused on delivering organic growth from its veterinary practices division, with this growth supported by future acquisitions where multiples are considered acceptable and where returns will be accretive," CVS said in its results statement. "In light of this, the group's rate of acquisitions slowed considerably in the second half of the financial year."

Since the end of June, CVS said, it had acquired another two practices — located in Ireland and the Netherlands.

The British veterinary sector is facing a skills shortage due in part to the country's decision in 2016 to leave the European Union. CVS reported raising salaries last year for veterinarians and veterinary nurses by an average 8% in a bid to plug staff vacancies.

Mars Petcare entered the veterinary-clinic business in 1994, when it became a part owner of Banfield Pet Hospital, which was based in Portland, Oregon, at the time (now in Vancouver, Washington). Mars later became the sole owner of Banfield, the largest general-practice clinic operator in the U.S., with 1,054 locations.

In 2015, Mars bought a second U.S. practice brand, BluePearl, a chain of specialty and emergency hospitals founded in Florida. In 2016, it acquired Pet Partners, a chain based in upstate New York.

In 2017, Mars made its largest veterinary practice acquisition since Banfield when it bought VCA Inc., the second-largest practice operator in the U.S. That move put more than 2,000 locations under one owner.

In 2018, Mars made its first foray into practice ownership in Europe, with the purchase of Linnaeus, followed immediately by the acquisition of AniCura.

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