VCA Inc. WOOF , a provider of pet health care services in the U.S., has agreed to be acquired by Mars, Incorporated.
Mars has roped in VCA because of its successful business growth both organically and inorganically. Since 1986, when the company was founded, it has grown its business from one facility in Los Angeles to nearly 800 animal hospitals with 60 diagnostic laboratories throughout the United States and Canada.
The company has consistently seen improvement in revenues over the past several years. From 2006-2015, it has grown at a CAGR of 9% while its EBIDTA has grown at a CAGR of 7.52%. The company's consistent earnings growth is also reflected in its share price which has improved 122% from 2006-2016 compared with the Zacks categorized Medical-Hospital
industry's gain of 95.6%.
Coming back, Mars will acquire all the outstanding shares of VCA Inc. for $93 per share. The total value of the deal comes at nearly $9.1 billion, including $1.4 billion in outstanding debt. VCA is being acquired at a premium of approximately 41% over its 30-day volume weighted average price on Jan 6, 2017, and a premium of approximately 31% over its closing price the same day.
The deal has been accepted by shareholders of both companies. By being a part of Mars, an established name in the pet care industry for over 80 years, VCA should be able to gain the scale and size required to provide high quality service to pets ranging from wellness and prevention to primary, emergency and specialty care.
Though the company will be acquired by Mars, it will retain its own identity by being a separate and distinct business unit within Mars Petcare. The present headquarters of the company in Los Angeles will remain. And the company will continue to pursue its business model and strategic objectives.
VCA Inc. carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical space are Cancer Genetics, Inc. CGIX , INC Research Holdings, Inc. INCR and PRA Health Sciences, Inc. PRAH . While Cancer Genetics sports a Zacks Rank #1 (Strong Buy), the other two stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Cancer Genetics beat expectations in three out of the last four quarters, with an average positive surprise of 9.5%.
INC Research Holdings beat expectations in three out of the last four quarters, with an average positive surprise of 8.21%.
PRA Health beat expectations in three out of the last four quarters, with an average positive surprise of 7.48%.
Zacks' Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report VCA Inc. (WOOF): Free Stock Analysis Report PRA Health Sciences, Inc. (PRAH): Free Stock Analysis Report INC Research Holdings, Inc. (INCR): Free Stock Analysis Report Cancer Genetics, Inc. (CGIX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research