MWI Veterinary Supply Inc. completed a $7 million acquisition of Nelson Laboratories LP, a distributor of livestock vaccines and other animal health products in the Midwest.
The purchase included “substantially all” of Nelson Laboratories’ assets, according to a March 21 statement from Meridian, Idaho-based MWI. Privately held Nelson Laboratories, which was previously owned by heirs of former Miami Dolphins owner Joe Robbie, distributes animal health products to more than 1,100 veterinary practices, primarily in the Midwest.
MWI’s acquisition is “a great thing” for Nelson Laboratories’ customers and employees, Deborah Olson, chairwoman of Sioux Falls-based Nelson, said in the statement.
“I am confident that the customers of Nelson Laboratories will appreciate the expanded services and product range offered by MWI,” she said, according to the statement.
The MWI acquisition signifies further consolidation in U.S. animal health supply and distribution as larger companies combine or absorb smaller competitors, aiming to capitalize on a rapidly growing industry that generates an estimated $19 billion globally.
Earlier this month, Lextron, Inc., a Greeley, Colo.-based distributor, said it planned to buy competitor Animal Health International Inc., for about $111 million in cash. Also this month, Eli Lilly & Co. launched a bid for the animal health business of Janssen Pharmaceutica NV, a unit of Johnson & Johnson Co. Eli Lilly’s animal health division, Elanco, would obtain about 50 products through the proposed deal.
Not all consolidation efforts have succeeded. Earlier today, Merck & Co. and Sanofi-Aventis SA said they abandoned a plan to combine their animal health businesses in a 50-50 joint venture, a year after announcing the proposed deal. In a joint statement, the companies cited the “increasing complexity” of implementing the deal, including anticipated divestitures and “the length of time necessary for the worldwide regulatory review process.”
Merck and Sanofi-Aventis “mutually determined that ending their plan is in the best interests of both companies and their respective shareholders,” the companies said in the statement. In March 2010, the companies announced plans to combine Merck’s Intervet animal health unit with its Sanofi counterpart, Merial. An Intervet-Merial combination would have created the world’s biggest animal health company by revenue, with about a quarter of the market.
MWI, which sells more than 30,000 products and supplies veterinarians in the U.S. and U.K., expects further growth in 2011 after profit surged 34 percent in 2010.
In a Feb. 3 statement, MWI said it hiked earnings and sales forecasts for the company’s fiscal 2011, boosting projected revenue to $1.45 billion to $1.5 billion for the 12 months ending Sept. 30. That would be an increase of 18 percent to 22 percent from 2010.
In November, MWI estimated fiscal 2011 revenue at $1.41 billion to $1.46 billion. Net income during MWI’s fiscal 2010 was $33.4 million, up from $24.9 million in2009.
MWI shares rose 8 cents to $76.24 in afternoon trading March 22. The stock is up 71 percent over the past 12 months.
An MWI spokeswoman didn’t immediately respond to a message March 22.