Mars is buying a pet health company for $9.1 billion

The candy- and pet food-maker Mars Inc is buying the animal hospital company VCA Inc for $93 a share, or about $9.1 billion, including $1.4 billion in debt.

VCA's stock was up about 30% in pre-market trading.

Morgan Stanley and BDT advised Mars on the deal, which is subject to shareholder and regulatory approval and expected to close in the third quarter. Barclays advised VCA.

"VCA is a leader across pet health care and the opportunity we see together—for pets, pet owners, veterinarians and other pet care providers —is tremendous," said Mars CEO Grand Reid in a statement.

VCA will operate as its own business within Mars Petcare.

Here's the press release:

MCLEAN, Va. and LOS ANGELES, Jan. 9, 2017 /PRNewswire/ -- Mars, Incorporated and VCA Inc. (NASDAQ: WOOF) today announced that they have entered an agreement under which Mars will acquire all of the outstanding shares of VCA for $93 per share, or a total value of approximately $9.1 billion including $1.4 billion in outstanding debt. The transaction price represents a premium of approximately 41 percent over VCA's 30-day volume weighted average price on January 6, 2017, and a premium of approximately 31 percent over VCA's closing price on January 6, 2017. The agreement has been unanimously approved by the boards of directors of both companies.

VCA joins Mars Petcare, one of the world's leading pet care providers. Pet care has been an important part of Mars for over 80 years. The transaction reaffirms Mars' commitment to the pet care industry and the veterinary profession, and once completed will help drive Mars Petcare's purpose to create A Better World for Pets. Mars Petcare's portfolio of Veterinary Services businesses includes BANFIELD® Pet Hospital, BLUEPEARL® and PET PARTNERS. Together with VCA, these businesses will provide an unprecedented level of access to high quality veterinary care for pets, from wellness and prevention to primary, emergency and specialty care. Mars Petcare is already an industry leader in pet nutrition with global brands that include ROYAL CANIN®, PEDIGREE® and WHISKAS®. Mars has a growing business in pet DNA testing through the WISDOM PANEL®, and in 2015 also acquired pet technology provider WHISTLE.

"We are thrilled to welcome VCA to the Mars family and to our portfolio of brands and businesses around the world," said Mars Chief Executive Officer Grant F. Reid. "VCA is a leader across pet health care and the opportunity we see together—for pets, pet owners, veterinarians and other pet care providers —is tremendous. We have great respect for VCA, with whom we share many common values and a strong commitment to pet care. Together, we will be able to provide even greater value, better service and higher quality care to pets and pet owners."

Since its founding in 1986, VCA has grown from one facility in Los Angeles to nearly 800 animal hospitals with 60 diagnostic laboratories throughout the United States and Canada. Through organic growth and a series of acquisitions, VCA has become one of the largest and most diverse pet healthcare companies, operating across four divisions including veterinary services, laboratory diagnostics, imaging equipment and medical technology, and pet care services.

"Joining the Mars family of brands provides significant value to our stockholders while also preserving the Company's values and a culture focused on investing in our people and facilities to promote excellence in pet care and long-term growth," said VCA Chief Executive Officer Bob Antin. "Mars has a long-standing commitment to pet health, wellness and nutrition. We will work together every day to continue to provide the quality care and excellent service VCA is known for to our clients and their pet families."

"We have always been impressed by VCA and the excellent services it offers to pets across diverse business segments," said Mars Global Petcare President Poul Weihrauch. "VCA's industry-leading partnerships with veterinarians and pet care providers together with its expertise in veterinary services, diagnostics and technology will position Mars to deliver accessible, quality care and continue to create a better world for pets. VCA's philosophy of partnering with the veterinary profession and educational institutions is aligned with our core values and culture. We look forward to together providing the best care possible for pets."

As one of the world's leading pet care providers, Mars Petcare is committed to attracting, developing and retaining the best veterinarians and pet care professionals in the world, supporting them in their efforts to provide cutting edge delivery of healthcare to pets and to advancing the profession.

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RELATED: 5 of the most popular discontinued candy bars

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5 of the most popular discontinued candy bars
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5 of the most popular discontinued candy bars

Seven Up Bar

Invented in the 1930s by Pearson’s Candy, Seven Up was a chocolate-covered bar with seven chambers that each contained a different filling, which changed over the years, but included coconut, butterscotch caramel, buttercream, fudge, Brazil nut, cherry cream, and orange jelly. The bar was discontinued in 1979, although amazingly it retains a devoted fan base. “People loved that there was this whole mystery to it,” Lacey said. “People are always going, ‘Why won’t they bring back the Seven Up bar?'” Those desiring a fix may try the similar Necco’s Sky Bar, but lower those expectations: The Sky Bar only has four chambers (fudge, caramel, vanilla, and peanut) compared to Seven Up’s seven.

Image courtesy of The Candy Wrapper Museum

PB Max

M&M Mars dreamt up this bar—creamy peanut butter and oats atop a square of whole grain cookie, all covered in milk chocolate—as an answer to Hershey’s Reese’s Peanut Butter Cup in the late 1980s. But it was positioned as a snack rather than a candy bar, which may have led to its downfall. “One of the things that I remember about it was that it literally weighed a ton… the heft of it was scary to me!” said Kimmerle. That said, she’s since come to believe that the PB Max was simply ahead of its time. “I think it was before the era when you could find a whole aisle of Kind bars and granola bars and that kind of thing. My thought is maybe it was not a great name, maybe had a little too much protein… People always ask me what happened to it.”

Image courtesy of Youtube

Marathon Bar

“I’ll describe it as ‘braided caramel,’ but it was so much more than that,” Kimmerle said. “The packaging was wacky. It was really thin, but very long, and to prove it, there was a little ruler on the back, and it was covered in chocolate.” First sold in the early 70s, its run was done a decade later, perhaps because its braided structure made it difficult to produce. Today’s Curly Wurly bar is similar, but as Lacey points out, “it’s not the same size, doesn’t have the same ratio” and doesn’t command the same nostalgia.

Image courtesy of The Candy Wrapper Museum

Milkshake Bar 

Produced by the former Hollywood Candy Company, the Milkshake bar emerged in the 1920s, around the same time as the Milky Way bar. They were fairly similar—both made with milk chocolate, caramel, and nougat—except that the Milkshake’s nougat was malted. “It was a little lighter and fluffier than a Milky Way, and you could put it in the freezer and eat it like an ice cream bar in the summer,” recalled Lacey. It disappeared sometime in the late 1970s or early 1980s, perhaps because of turmoil within the company. Hollywood Candy Company was acquired by the Leaf Candy Company in 1988, which later became part of Hershey in 1996. “During this period, most of the candy [produced by Hollywood] was phased out except for Pay Day and the Zero bar,” explained Benjamin.

Image courtesy of The Candy Wrapper Museum

Reggie! Bar 

Named for baseball great and onetime New York Yankees right fielder Reggie Jackson, the Reggie! bar was a round, milk chocolate-covered bar with a peanuts and a caramel center. It was originally intended as a novelty candy and made its debut at the Yankees home opener in 1976, but proved so popular that it stuck around before getting benched in 1982. A slightly-tweaked Reggie! bar with peanut butter instead of caramel made a brief comeback in the 90s, but it was gone for good just a short time later. Maybe it’s because the bars could turn dangerous? Lacey offers a fascinating anecdote: “When it was given out at the home opener of the Yankees game, the fans started throwing them out onto the field because Reggie was batting really well,” she recalled.“The fans got so excited that it turned into this fiasco!” (An aside: The original Reggie! bar was a heck of a lot like a Baby Ruth, which is often mistakenly thought to have a connection to baseball legend Babe Ruth. It was more likely named for President Grover Cleveland’s daughter Ruth.)

Image courtesy of The Candy Wrapper Museum

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