Two leading distributors of veterinary products—Patterson Companies Inc. and Animal Health International Inc.—have agreed to a $1.1 billion merger that would double Patterson’s veterinary business.
Patterson’s takeover of Animal Health International was announced today and is expected to close by late July.
The deal came less than three months after another major acquisition in the veterinary channel: AmerisourceBergen Corp.’s $2.5 billion purchase of MWI Veterinary Supply Inc.
Patterson, a St. Paul, Minn., company that also distributes products in the dental and medical rehabilitation fields, announced that it would try to sell its smaller rehabilitation subsidiary.
“We believe concentrating Patterson’s resources and management on growing our closely aligned dental and veterinary units—both organically and through acquisitions—will enrich our ability to maximize the return on the capital we invest,” said chairman and CEO Scott P. Anderson.
The company’s Devens, Mass.-based subsidiary, Patterson Veterinary Supply, generated more than $1.2 billion in sales in fiscal 2014 across the United States and United Kingdom. Doing business primarily with small animal hospitals, Patterson distributes veterinary consumables, equipment, software, vaccines and drugs.
Animal Health International, based in Greeley, Colo., reported sales of $1.5 billion in the 12 months ended March 2015. The company represents more than 1,000 manufacturers in the sale of products and services to veterinary clinics and to farmers and ranchers in the equine, cattle, poultry and swine industries.
Animal Health International’s president and CEO, John Adent, will stay on as president of the merged veterinary distributors. Patterson’s current president, George Henriques, will become the chief commercial officer.
“Together they will form a management group that is second to none in the animal health industry,” Anderson said.
The all-cash takeover of privately held Animal Health International will be financed through a $1 billion loan and $500 million line of credit, Patterson stated.
Animal Health International markets products across the United States and Canada. Two of its units—Hawaii Mega-Cor and Kane Veterinary Supply—are active in Hawaii and Canada, respectively.