VCA buyer Mars agrees to divest 12 hospitals
The threat of a monopoly leads to a government deal involving potential purchasers NVA, PetVet and Pathway.
Mars Inc., which owns the Banfield and BluePearl veterinary hospital networks and is finalizing the $9.1 billion purchase of the VCA chain, has agreed to divest 12 clinics to satisfy monopoly issues.
The Federal Trade Commission is accepting public comment until Sept. 29 on a consent agreement that calls on Mars to spin off VCA or BluePearl hospitals in 10 cities to one of three competitors: National Veterinary Associates, PetVet Care Centers and Pathway Partners Vet Management Co.
The matter stems from FTC concerns that the addition of more than 750 VCA hospitals would allow Mars to dominate specialty or emergency services in some markets. VCA and BluePearl specialty or emergency hospitals operating in those areas under one owner would stifle competition, the government argued.
Under the agreement:
- NVA will acquire hospitals in Kansas City, Missouri; New York; and Phoenix.
- Pathway will purchase hospitals in Chicago; Corpus Christi, Texas; San Antonio; and Seattle.
- PetVet will buy hospitals in Portland, Oregon; Rockville, Maryland; and Vienna, Virginia.
The consent agreement does not specify which city or cities would see more than one hospital change hands.
Employees at the targeted hospitals would be enticed to stay and help the acquired hospitals succeed. Among the enticements called for in the consent agreement are:
- Retention bonuses for specialty veterinarians.
- Continuation of all employee benefits and scheduled raises and bonuses.
- Vesting of pension benefits.
The agreement also requires that Mars:
- Refrain from contracting with a specialty or emergency veterinarian at a divested clinic for one year.
- Provide transitional services for one year while the buyer “implements its own quality care, billing and supply systems.”
- Notify the FTC if the company intends to acquire another specialty or emergency hospital in the targeted areas.
The public comment form is available at http://bit.ly/2xK61XS. After the Sept. 29 deadline, the FTC will decide whether to approve, alter or kill the consent agreement.