In line with its strategy to grow via strategic acquisitions, MWI Veterinary Supply, Inc. (MWIV) recently acquired U.K. based Vetspace Limited and some of its affiliates for an undisclosed amount.
According to MWI Vet, the acquisition is well aligned with the company’s business. It will help expand MWI Vet’s value-added services and support its growth strategy to offer innovative, differentiated solutions to veterinarians.
U.K.based Vetspace is a provider of practice management software to veterinary practices. It develops specialized software including both traditional and cloud-based practice management software. With this buyout, MWI Vet will be able to draw the benefits of Vetspace's huge customer base, given that the latter has already completed the installation of 1,000 of its software solutions in the U.K. market.
Vetspace's revenues are expected to reach $7 million in the current fiscal ending Sept 30, 2014. On the other hand, according to MWI Vet, its acquisition-related expenses should be around $0.5 million during the year. However, the company expects this acquisition to have a roughly neutral impact on EPS in the fiscal year beginning Oct 1, 2014.
Over the past few years, MWI Vet has made several successful acquisitions, which have duly expanded its operations in the U.S. and beyond. As one of the leading distributors of animal health products to veterinarians across the U.S., the company has been on an acquisition spree to expand its presence in areas where it has low market share as well as to foray into new areas. Last November, the company took over all the assets of U.S.-based key competitor IVESCO Holdings for $67.5 million. Per management, the acquisition will boost MWI Vet’s foothold in the production animal market.
Currently, the company is focusing on the successful integration of IVESCO including retention of customers and sales during the transition. With this acquisition, the company is in a position to offer an enhanced product portfolio with improved supply chain performance to its vendors and customers. IVESCO's complimentary strength in the production animal market will allow MWI Vet to help meet the increasing global demand for protein.
The stock currently carries a Zacks Rank #3 (Hold).
Some well-placed Medical stocks worth a look are Amedisys Inc. (AMED), Gentiva Health Services Inc. (GTIV) and HEALTHSOUTH Corp. (HLS). All these stocks sport a Zacks Rank #1 (Strong Buy).
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