Patterson closes on $1.1B deal for Animal Health International, doubling size of its vet unit

Patterson CEO Scott Anderson

Patterson Companies ($PDCO), a Minnesota-based production and animal health distribution company, completed its $1.1 billion acquisition of Animal Health International in a deal that doubles the size of the company's veterinary unit.

The sale was financed with a $1 billion unsecured term loan and a $500 million revolving line of credit, the company said in a press release. The company said the transaction will impact about half of its fiscal first quarter, which ends Aug. 1.

The company said it will provide updated and revised guidance that reflects the sale during its next fiscal first-quarter earnings call scheduled for Aug. 27.

Patterson began its expansion into animal health in 2013 when it snapped up U.K. distributor National Veterinary Services. The company is focused on veterinary markets in the U.S., Canada and the U.K.

Scott Anderson, Patterson's chairman and CEO, said in a statement that the top priority going forward for the company and its senior executives "is to leverage our broadened product portfolio and best-in-class technical and service offering to take advantage of the growth opportunities in the animal health industry."

Last month, the company reported record fiscal fourth-quarter results fueled by its fast-growing animal health unit. The company's sales rose 4% year-over-year to $1.1 billion, while its net income came in at $64.5 million ($0.65 per diluted share), compared with $55.7 million ($0.55) in the same period a year ago.

During the quarter, sales in the Patterson Veterinary unit rose 2.7% to $356 million on a constant-currency basis, driven largely by a 32% increase in equipment sales.

- see the release