Mars buys specialty veterinary practices in Britain

Acquisition marks US company's biggest pet care deal in 2020

Published: December 08, 2020
By Ross Kelly

Dick White Referrals photo
Dick White Referrals is one of five specialty practices that Mars is acquiring in the U.K. through its Linnaeus unit. The large referral center, which employs 105 veterinarians, recently expanded, more than doubling its physical size.

Mars Inc.'s veterinary business has agreed to buy five specialty referral centers in Britain for up to £100 million ($133.2 million), continuing a recent drive by the U.S. company into the European pet care market.

The practices are being bought from British group Pets at Home by Mars' Linnaeus division, which itself was acquired by Mars in 2018.

Pets at Home said the deal was subject only to customary legal approvals and was expected to be completed between January and March. It will get an initial £80 million ($106.6 million) payment from Linnaeus and up to £20 million ($26.6 million) in performance payments contingent on future financial milestones being met by the referral centers.

Founded more than a century ago in the United States as a candymaker, McLean, Virginia-based Mars has become the biggest veterinary company in the world.

Its Linnaeus operation owns 157 clinics in the U.K. employing around 35,000 people. The five Pets at Home centers would add another 680 staff, Linnaeus said in a statement. The largest among them is Dick White Referrals near Cambridge, which describes itself as one of Europe's largest veterinary specialist centers, with 105 veterinarians on its staff of 339. Dick White Referrals last year completed construction of a 30,000-square-foot extension that more than doubled its physical size.

The other businesses being acquired are Anderson Moores near Winchester; North West Veterinary Referrals and Eye Vet, both in Runcorn; and Veterinary Specialists Scotland, in Livingston, which opened its doors in October.

Linnaeus also acquired five other veterinary practices in 2020, company spokesman Ian Gallagher told the VIN News Service. They are Woodward Veterinary Practice in Leicestershire; The Warren House Veterinary Group and Sandhole Veterinary Centre, both in Kent; Animal Ark Veterinary Centre in Essex; and Chess Veterinary Clinic in Hertfordshire.

Mars spokesperson Steve Ireland said the privately held company currently owns 2,500 veterinary clinics worldwide, operating under brands in the U.S. including Banfield Pet Hospital and VCA. The company expanded to Europe in 2018, when it acquired Linnaeus and Sweden-based AniCura, which has 350 clinics in 13 countries.

Ireland said Mars made no other "noteworthy" acquisitions in the veterinary realm in 2020. He and Gallagher declined to comment on the strategic rationale behind the deal with Pets at Home, saying they couldn't until the transaction is formally completed.

In a statement, Mars Veterinary Health International president Alejandro Bernal spoke only generally: "Pet care has been an important part of Mars for over 80 years and this strategic acquisition reaffirms our commitment both to the pet care industry and veterinary profession."

Charles Hall, who covers the pet care market as head of research for British investment bank Peel Hunt, said the deal will see Linnaeus achieve nationwide coverage in the U.K. "The price is steep, but it would have been very expensive to do organically," Hall said. (Organic growth involves growing internally, rather than by acquisition.)

He speculated that Mars might snap up more practices in Britain to feed business to the newly acquired referral centers. "They will probably add a lot of first-opinion sites to ensure synergies are generated," Hall said.

For Pets at Home, the transaction marks a complete exit from specialty referral practice and leaves the British company to focus on its 440 general practice clinics and 451 pet stores. Pets at Home also agreed this month to acquire a telemedicine business, The Vet Connection, for £15 million ($20 million).

"For our shareholders, the disposal proceeds provide the group with additional resources to accelerate growth across our customer-focused pet care platform," Pets at Home chief executive Peter Pritchard said in a statement.

Hall at Peel Hunt said the specialist-referral practices were "probably a distraction" for Pets at Home. "The centers are likely to make only a small profit contribution, and they got an excellent price for them," he said. "They would have had to invest significantly to get to national coverage."

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