Chocolate may be bad for your puppy, but the company that makes Snickers and Milky Way chocolate bars is buying a bunch of pet hospitals.
VCA Inc., a Los Angeles company that runs a leading chain of animal hospitals and diagnostic labs, has agreed to be bought for $7.7 billion by Mars Inc., which is known for its candy but also owns a pet-care business.
VCA operates nearly 800 animal hospitals and 60 diagnostic laboratories in the United States and Canada, according to the Los Angeles Times. It employs 23,000 people, including about 1,400 in the Los Angeles area, and had 2015 revenue of $2.1 billion.
VCA’s founders said in a letter to employees that they had “mixed emotions” when approached by Mars but ultimately decided the offer was best for shareholders and employees. Mars, which is based in McLean, Virginia, and has $35 billion in annual sales, is the privately held maker of brands such as M&M’s, Snickers, Milky Way, Skittles, Dove chocolate and Wrigley’s gum.
The century-old company also has a major pet-care unit whose pet food brands include Pedigree, Whiskas and Sheba. It owns Banfield Pet Hospitals, many of which are in PetSmart Inc. retail locations.
VCA management said the company, which was launched in 1986, would keep its headquarters in Los Angeles and continue to operate under the VCA name as part of Mars.
The proposed merger calls for Mars to pay $93 for each of VCA’s shares and to assume VCA’s $1.4 billion in debt. After the deal was announced, VCA’s stock Monday shot up $20.02, or 28 percent, to $90.79 a share.
It’s unlikely there will be antitrust objections to the Mars-VCA deal because the combined entity would own roughly 6.5 percent of the North American market, or 26,000 animal hospitals, The Times quoted an analyst as saying. The companies didn’t indicate whether any job cuts may occur after the deal closes.
—City News Service