WASHINGTON, Jan. 9 (UPI) -- With the candy business expected to grow more slowly in the next several years than that for pet services, Mars Inc. announced Monday it's adding to its already sizeable pet business.
Mars will acquire the Los Angeles-based VCA Inc., a national pet care brand with 800 animal hospitals and 60 diagnostic labs, for $7.7 billion, the company announced on Monday, which will mean pet services will now be the largest division of the company -- not candy.
Mars is best known for making candy such as Snickers, Skittles, Wrigley's gum and M&M's, but it has a significant pet-related division already. Among the pet brands Mars owns is Pedigree, Whiskas, Sheba and the Banfield Pet Hospitals chain.
The VCA network stretches across the country and means Mars will hold 6.5 percent of the pet services industry. While sizable, analysts say the deal should not raise antitrust concerns because most of the veterinary industry is owned independently or by smaller companies.
"VCA is a leader across pet healthcare and the opportunity we see together -- for pets, pet owners, veterinarians and other pet care providers -- is tremendous," said Grant Reid, chief executive officer for Mars, in a statement.
Mars is paying $7.7 billion for the company, at $93 per share, and is taking on it's approximately $1.4 billion in debt. VCA has grown quickly in the last few years, adding veterinary offices and labs to its network, and increased its revenue from $1.5 billion in 2011 to $2.1 billion in 2015.
"We simply believe Mars... found VCA to be an attractive long-term asset, and we would expect the two businesses to complement one another quite nicely," said Nicholas Jansen, an analyst at Raymond James and Associates.
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