VCA Inc. to Acquire Majority Interest in Companion Animal Practices, North America
February 29 2016 - 8:00AM
Business Wire
Acquisition Adds 56 Animal Hospitals to
VCA’s North American Network of Animal Hospitals
VCA Inc. (NASDAQ Global Select Market: WOOF), a leading animal
healthcare company in the United States and Canada, announced today
the signing of a definitive agreement for VCA to acquire an 80%
ownership interest in Companion Animal Practices, North America
(CAPNA) for $344 million. CAPNA, located in Las Vegas, Nevada
operates a network of 56 free standing animal hospitals.
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The acquisition is conditioned upon the expiration or earlier
termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and other customary
closing conditions. Closing is expected between April and July
2016.
Bob Antin, Chairman and Chief Executive Officer of VCA, stated,
“We are very excited to create this partnership between VCA and
CAPNA. We have known and worked with CAPNA’s management and many of
its veterinary owners for years. We clearly share the belief that
we can make a difference in the veterinary profession. CAPNA’s
management team, under the leadership of Dennis Law, President,
will continue to operate CAPNA’s animal hospitals as an independent
operation sharing and leveraging many of the systems and processes
that VCA has in place.”
Mr. Antin continued, “We have confidence in this model which is
very similar to our Canadian business, which operates under an
independent management that takes advantage of VCA’s expertise and
infrastructure.”
Dennis Law, President of CAPNA, stated, “We are pleased about
our new relationship with VCA and we look forward to leveraging
their administrative infrastructure and financial resources to take
CAPNA to the next level. Our entire management team is excited by
the opportunity to grow our company and draw on VCA resources while
we retain the independence and culture that has made CAPNA the
success that it is.”
We anticipate that CAPNA will have annual 2016 revenues of
approximately $200 million and that it will be accretive to
non-GAAP diluted earnings per share. Assuming a closing during the
second quarter of 2016, we estimate an additional $0.03 to $0.04 in
2016 non-GAAP adjusted diluted earnings per share excluding
amortization, transaction and integration costs. The transaction is
expected to include an estimated $116 million from anticipated
future tax benefits, which will positively impact VCA’s cash flow
over the next 15 years. Including the present value of these
expected tax benefits, the purchase price of $344 million
represents a valuation multiple of approximately 10.7 times
expected 2016 EBITDA.
RBC Capital Markets, LLC served as the exclusive financial
advisor to CAPNA. Akin Gump Strauss Hauer & Feld served as
legal counsel to VCA Inc. and Gibson Dun represented CAPNA in the
transaction.
About CAPNA
CAPNA is a national group of high quality companion animal
practice owners that believe that the improved practice of medicine
and surgery is the key to success in veterinary medicine. Founded
in 2010 with the merger of 17 hospitals in 10 states, CAPNA has
grown to 56 hospitals operating in 18 states. For more information
on CAPNA, visit its website at www.capna.biz.
About VCA Inc.
VCA is a leading animal healthcare company with operations in
the United States and Canada. Through VCA Animal Hospitals, VCA
owns, operates and manages the largest network of free-standing
veterinary hospitals in the United States and Canada, while its
Antech Diagnostics, division operates the preeminent network of
veterinary exclusive clinical laboratories in North America. VCA
also supplies diagnostic imaging equipment to the veterinary
industry through its Sound™ division and through Camp Bow Wow,
franchises a premier provider of pet services including dog day
care, overnight boarding, grooming, and other ancillary services at
specially designed pet care facilities. For further information on
VCA and its various businesses, visit its website at
www.vca.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including the statements as to the expected growth and other
benefits of the acquisition, expected impact on non-GAAP adjusted
diluted earnings per share, anticipated tax benefits, the timeframe
for closing the acquisition, and whether the satisfaction of the
closing conditions will be met and the acquisition consummated.
Actual results may vary substantially as a result of a variety of
factors. Among the important factors that could cause actual
results to differ are: the ability of the companies to satisfy the
conditions to the closing of the transaction; the ability of the
companies to consummate the transaction; a material adverse change
in the financial condition or operations of either company; the
ability to successfully integrate the two companies and achieve
expected operating synergies following the transaction; the rate of
VCA’s laboratory internal revenue growth and animal hospital
same-store revenue growth; the level of direct costs and the
ability of VCA to maintain revenue at a level necessary to maintain
expected operating margins; the level of selling, general and
administrative costs; the effects of VCA’s recent acquisitions and
its ability to effectively manage its growth and achieve operating
synergies; any disruption in VCA’s information technology systems
or transportation networks; the effects of competition; any
impairment in the carrying value of VCA’s goodwill; changes in
prevailing interest rates; VCA’s ability to service its debt; and
general economic conditions. These and other risk factors are
discussed in the Company's periodic reports filed with the
Securities and Exchange Commission, including the VCA’s Report on
Form 10-K for the year ended December 31, 2015, and the reader is
directed to these statements for a further discussion of important
factors that could cause actual results to differ materially from
those in the forward-looking statements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160229005553/en/
For CAPNA:Dennis Law, 801-631-5844dlaw@capna.bizorFor VCA:Tom
Fuller, 310-571-6505tom.fuller@vca.com
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