Big gets bigger in 2016

Year-end snapshot of noteworthy business deals in animal-health market

December 29, 2016 (published)
By VIN News Service staff

2016 brought a new prospective merger of major animal-health drug companies, while the two largest owners of veterinary practices continued to enlarge their holdings. Throughout the veterinary-business landscape, companies bought other companies in an array of areas — veterinary distribution; pet and livestock retail; and media, to name a few. Here's a sampling:

1. Boehringer Ingelheim – Merial

BI set out in June to swap its consumer health-care business for Sanofi's animal-health business, Merial. The $25 billion deal, subject to review by U.S. and European Union antitrust regulators, would make BI the world's No. 2 animal-health company, behind Zoetis. It would more than double BI's global animal-health sales, judging from 2015 figures (1.36 billion euros, or $1.43 billion, for BI; and 2.5 billion euros, or $2.62 billion, for Merial). The EU gave approval after BI agreed to sell its overseas vaccine and drug assets to Ceva Santé Animale SA of France. BI also agreed to sell its U.S. pet-vaccines business and a manufacturing plant to Elanco Animal Health for $885 million. U.S. Federal Trade Commission approval is pending. The deal is expected to close in early 2017. 

2. VCA – Companion Animal Practices, North America

The largest publicly traded owner of veterinary practices, VCA Inc., paid $344 million for an 80 percent ownership interest in the animal hospital chain CAPNA. The sale closed May 1, adding 56 freestanding practices in 18 states to VCA's network of more than 770 animal hospitals in the United States and Canada.

VCA also owns a laboratory network, Antech Diagnostics, and a medical-technology business, Sound-Eklin; and has part ownership in Vetstreet, an electronic client-communications and veterinary-marketing company; and VetSource, which delivers veterinary pharmaceuticals to clients of participating clinics.

3. Mars – PetPartners

The largest private owner of veterinary practices, Mars Petcare, acquired PetPartners, a rapidly expanding company that procured 58 formerly independent practices by the close of 2015 and is expected to amass another 80 practices by the end of 2016. PetPartners operates separately from Mars' other veterinary hospital units — Banfield Pet Hospital (which has about 960 general-practice hospitals) and BluePearl (57 specialty and emergency hospitals). PetPartners clinics keep their original names and styles and do not display the Mars brand. Financial terms of the acquisition were kept confidential.

Mars Petcare also bought Whistle, a startup maker of an electronic collar for dogs that tracks the wearer's location and activity.

4. Dechra – Putney

Dechra Pharmaceuticals PLC, a United Kingdom-based developer, manufacturer and marketer of special veterinary drugs, paid $200 million for Putney Inc. of Maine, a maker of generic prescription medicines for pets. The deal closed in April.

Dechra also entered the veterinary market in Latin America by acquiring Laboratorios Brovel SA de CV, a producer and distributor of veterinary drugs based in Mexico City. 

5. Pet Valu – Pet Supermarket

A merger of Pet Valu and Pet Supermarket in June created the third-largest pet supply chain in North America, after PetSmart and Petco. The new company, Pet Retail Brands, has more than 930 stores in the United States and Canada. Pet Valu and Pet Supermarket are styled after small neighborhood stores and continue to operate as separate brands.

6. MWI Animal Health – St. Francis Group

Veterinary distribution company MWI, acquired in 2015 by drug wholesale giant Amerisource Bergen, expanded its global footprint in February with the purchase of St. Francis Group. St. Francis is the United Kingdom's largest veterinary buying group, with more than 460 member practices. The deal followed MWI's 2015 purchase of Vetswest, a U.K. veterinary buying group with 250 member practices.

7. Henry Schein – RxWorks

Henry Schein, which describes itself as the world's largest provider of health-care products and services to office-based dental, veterinary and medical practitioners, in February acquired the veterinary practice-management software provider RxWorks Inc., which has customers chiefly in Australia, New Zealand, the United Kingdom and the Netherlands. Schein already had a large piece of the market, with ownership stakes in McAllister Software Systems, creator of the AVImark practice-management system; and ImproMed Inc., creator of Infinity practice-management software.

In November, Schein acquired 80.1 percent ownership of Vetstreet from VCA. VCA kept the remaining share.

8. PRN Pharmacal – Veterinary Products Laboratories

Also known as Pegasus Laboratories Inc., PRN Pharmacal in November acquired the animal-health assets of Veterinary Products Laboratories, which include nutraceuticals, surgery supplies and insecticides.

9. Health Media Network – PetCARE TV

A veterinary waiting-room network founded in 1989, PetCARE TV came under the ownership of Health Media Network in July. Health Media Network provides programming for doctors' offices. It bills itself as the fastest-growing digital “point of care” media company in the United States.

10. Animart – Stockmen's/Midwest Supply

Animart, an animal-health supplier focused on livestock, acquired Stockmen's/Midwest Supply, a 60-year-old farm-supply retailer and catalog company that operates a veterinary clinic in its store in West Fargo, North Dakota. Financial details of the transaction, which closed in July, were not disclosed.

Graphics by Tamara Rees and Adobe Stock

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