By Leslie Picker
The company name Mars Inc. evokes images of M&M’s, Snickers and Dove chocolate, and possibly Wrigley chewing gum.
Soon, a majority of its business will be related to pets, thanks to a $7.7-billion acquisition announced recently.
Mars agreed to buy VCA, a company that owns about 800 animal hospitals, a lab business and dog day-care franchises that operate under the name Camp Bow Wow. VCA will be part of Mars Petcare but will operate as a “distinct and separate business unit,” the companies said in a statement.
Poul Weihrauch, the president of Mars Petcare, said in an interview that Mars’s “love story” with pets goes back to 1935. That year, Forrest Mars Sr. bought Chappell Brothers, giving the candy company access to Chappie brand canned dog food.
Today, Mars has 39 brands in its Petcare portfolio, its second largest division. With this deal, Petcare will become its largest business, as VCA adds about $2 billion in revenue. Together, Petcare, chocolate and Wrigley contribute 90% of company sales.
Merging with Mars, which is privately held, rids VCA of the challenges of being a public company, including the difficulty of justifying large investment in research and development, said Bob Antin, the chief executive, in an interview. He said he would remain chief executive of the unit after the acquisition closes.
“We’ll be able to leverage off their technology, and the amazing part about it is their company is focused on what’s best for veterinarians,” Mr. Antin said.
Mars agreed to acquire VCA for $93 a share in cash, 31% higher than where the shares closed last week.
Mars has committed financing from JPMorgan Chase for the transaction, which has been approved by both boards but still needs approval from VCA shareholders and regulators. The companies said they expected the transaction to close in the third quarter of this year.
© 2017 The New York Times
Image credits: Ruth Fremson/The New York Times