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Acquisitions (Tables)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2012
AVC [Member]
Dec. 31, 2012
Acquisitions, excluding BrightHeart and Pet DRx [Member]
Dec. 31, 2011
BrightHeart [Member]
Dec. 31, 2011
Vetstreet [Member]
Dec. 31, 2010
Pet DRx [Member]
Dec. 31, 2012
Think Pets Inc [Member]
Business Acquisition [Line Items]              
Summary of acquisitions of animal hospitals and laboratories

 
 
For the Years Ended December 31,
 
 
2012
 
2011
 
2010
Animal hospitals:
 
 
 
 
 
 
Acquisitions (1), excluding AVC in 2012, BrightHeart in 2011 and Pet DRx in 2010
 
35

 
18

 
27

AVC (1)
 
44

 
—

 
—

BrightHeart(1)
 
—

 
9

 
—

Pet DRx(1)
 
—

 
—

 
23

New facilities
 
1

 
—

 
—

Acquisitions relocated into our existing animal hospitals
 
(6
)
 
(3
)
 
(2
)
Sold, closed or merged
 
(6
)
 
(11
)
 
(9
)
Total
 
68

 
13

 
39

Laboratories:
 
 
 
 
 
 
Acquisitions
 
1

 
1

 
—

Acquisitions relocated into our existing laboratories
 
(1
)
 
—

 
—

New facilities
 
2

 
2

 
4

Closed or merged
 
—

 
—

 
(1
)
Total
 
2

 
3

 
3

 
(1) 
Associate Veterinary Clinics (1981) LTD ("AVC") was acquired on January 31, 2012, BrightHeart Veterinary Centers (“BrightHeart") was acquired on July 11, 2011 and Pet DRx Corporation ("Pet DRx”) was acquired on July 1, 2010.
            
Summary of purchase price and allocation of the purchase price  
AVC Investment
On January 31, 2012, we increased our investment in AVC by approximately CDN $81 million (approximately US $81 million) becoming the sole non-veterinarian shareholder of AVC. At the time of the additional investment, AVC operated 44 animal hospitals in three Canadian provinces, offering services ranging from primary care, to specialty referral services and 24-hour emergency care. This investment and planned additional investments in AVC will facilitate our continued expansion in the Canadian market. At the time of the investment, AVC had annualized revenue of approximately CDN $95 million (approximately US $95 million). Our consolidated financial statements reflect the operating results of AVC since January 31, 2012.
The following table summarizes the total investment and preliminary allocation of the investment in AVC (in thousands):

Consideration:
 
Cash
$
48,819

Assumed debt
25,915

 
 
Fair value of total consideration transferred
$
74,734

 
 
Allocation of the Purchase Price:
 
Tangible assets
11,694

Identifiable intangible assets(1)
25,170

Goodwill(2)
79,707

Other liabilities assumed
(21,826
)
 
$
94,745

Noncontrolling interest
(8,161
)
Fair value of pre-existing investment in AVC
(11,850
)
 
 
Total
$
74,734


(1) 
Identifiable intangible assets include customer relationships, trademark and covenants-not-to-compete. The weighted- average amortization period for the total identifiable intangible assets is approximately six years. The customer-related intangible assets weighted-average amortization period is approximately five years. The trademark weighted-average amortization period is approximately ten years. The covenants-not-to-compete weighted-average amortization period is approximately three years.

(2) 
We expect that $362,000 of the goodwill related to the AVC acquisition recorded as of December 31, 2012 will be fully deductible for income tax purposes.
Animal Hospital and Laboratory Acquisitions, excluding AVC, BrightHeart and Pet DRx
The following table summarizes the aggregate consideration, including acquisition costs, paid by us for our acquired animal hospitals and laboratories, excluding AVC, BrightHeart and Pet DRx, and the allocation of the purchase price (in thousands):
 
 
For Years Ended December 31,
 
 
2012
 
2011
 
2010
Consideration:
 
 
 
 
 
 
Cash
 
$
78,629

 
$
34,243

 
$
69,456

Holdback
 
2,425

 
1,500

 
—

Contingent consideration
 
1,306

 
79

 
2,857

Fair value of total consideration transferred
 
$
82,360

 
$
35,822

 
$
72,313

Allocation of the Purchase Price:
 
 
 
 
 
 
Tangible assets
 
$
3,515

 
$
1,237

 
$
3,592

Identifiable intangible assets
 
14,718

 
6,414

 
9,510

Goodwill(1)
 
64,253

 
28,171

 
60,839

Notes payable and other liabilities assumed
 
(126
)
 
—

 
(1,628
)
Total
 
$
82,360

 
$
35,822

 
$
72,313

 
(1) 
We expect that $60.4 million, $26.4 million and $58.2 million of the goodwill recorded in 2012, 2011 and 2010, respectively, will be fully deductible for income tax purposes.
BrightHeart Acquisition
On July 11, 2011, we acquired 100% of the membership interests of BrightHeart for approximately $50 million in cash. BrightHeart operates nine animal hospitals, eight of which focus on the delivery of specialty and emergency medicine. The acquisition increased our level of market recognition in areas where we had an existing market presence. Our consolidated financial statements reflect the operating results of BrightHeart since July 11, 2011.




VCA Antech, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
 
4.
Acquisitions, continued
The following table summarizes the final purchase price and the final allocation of the purchase price (in thousands):

Consideration:
 
Cash
$
23,490

Assumed debt
26,048

Contingent consideration
481

 
 
Fair value of total consideration transferred
$
50,019

 
 
Allocation of the Purchase Price:
 
Tangible assets
$
18,921

Identifiable intangible assets(1)
8,796

Goodwill(2)
39,806

Other liabilities assumed
(17,504
)
 
 
Total
$
50,019


(1) 
Identifiable intangible assets primarily include customer relationships. The weighted average amortization period for both the total identifiable intangible assets and the customer-related intangible assets is approximately five years.
(2) 
We expected that $40.7 million of the goodwill related to the BrightHeart acquisition recorded as of December 31, 2011 would be fully deductible for income tax purposes.
On August 9, 2011, we acquired 100% of the ownership interests of Vetstreet, a provider of online communications, professional education and marketing solutions to the veterinary community. The acquisition of Vetstreet expands the breadth of our product offerings to the veterinary community and is expected to provide long-term synergies to our existing businesses. We acquired Vetstreet for a final purchase price of $146.4 million, net of cash acquired. The following table summarizes the final purchase price and final allocation of the purchase price (in thousands):
VCA Antech, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
 
4.
Acquisitions, continued
 
Consideration:
 
Cash
$
146,420

 
 
Allocation of the Purchase Price:
 
Tangible assets
$
8,565

Identifiable intangible assets(1)
45,810

Goodwill(2)
96,149

Other liabilities assumed
(4,104
)
 

Total
$
146,420


(1) 
Identifiable intangible assets include customer relationships, technology, trademarks, non-compete agreements and contracts. The weighted average amortization period for the total identifiable intangible assets is approximately nine years, for the customer-related intangible assets approximately ten years, for the technology and trademarks approximately seven years, for the non-compete agreements approximately two years and for the contracts approximately eight years.
(2) 
We expected that all of the goodwill related to the Vetstreet acquisition recorded as of December 31, 2011 would be fully deductible for income tax purposes.
Our Vetstreet business is reported within our “All Other” category in our segment disclosures combined with our Medical Technology operating segment.
Pet DRx Acquisition
On July 1, 2010, we acquired a 70.4% interest in Pet DRx Corporation (“Pet DRx”), a provider of veterinary primary care and specialized services to companion animals. Pet DRx operated 23 animal hospitals in California at the time of its acquisition. The acquisition expanded our presence in the California market. We acquired the remaining portion of Pet DRx on November 1, 2010. The aggregate purchase price in both steps was $41.3 million. Our consolidated financial statements reflect the operating results of Pet DRx since July 1, 2010.

The following table summarizes the final purchase price and the final allocation of the purchase price (in thousands):

Consideration:
 
Assumed debt
$
29,532

Cash paid to shareholders
7,670

Cash paid for holdbacks
750

 
 
Fair value of total consideration transferred
$
37,952

 
 
Allocation of the Purchase Price:
 
Tangible assets
$
20,031

Identifiable intangible assets
3,074

Goodwill(1)
41,686

Other liabilities assumed
(26,839
)
 
 
Total
$
37,952


(1) 
We expected that $6.4 million of goodwill would be fully deductible for income tax purposes.

VCA Antech, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
 
4.
Acquisitions, continued
 
Other Acquisitions
ThinkPets, Inc. ("ThinkPets")
On February 1, 2012, we acquired 100% interest in ThinkPets for $21 million , payable by delivery of 473,389 shares of VCA common stock and $10.5 million in cash. We intend to combine the operations of ThinkPets with our Vetstreet business, which we expect will improve the products and services it offers to clients of both companies. Our consolidated financial statements reflect the operating results of ThinkPets since February 1, 2012.

The following table summarizes the preliminary purchase price and preliminary allocation of the investment in ThinkPets (in thousands):
Consideration:
 
Cash
$
7,468

Issuance of common stock for acquisitions
10,500

Holdback
1,050

 
 
Fair value of total consideration transferred
$
19,018

 
 
Allocation of the Purchase Price:
 
Tangible assets
$
2,093

Identifiable intangible assets(1)
7,221

Goodwill(2)
12,155

Other liabilities assumed
(2,451
)
 
 
Total
$
19,018

 
 
 
(1) 
Identifiable intangible assets include customer relationships, contracts and trademarks. The weighted average amortization period for the total identifiable intangible assets is approximately eight years, for the customer-related intangible assets approximately nine years, for the technology approximately four years, and for the trademarks approximately two years.
(2) 
We expect that $821,000 of the goodwill related to the ThinkPets acquisition recorded as of December 31, 2012 will be fully deductible for income tax purposes.
Business Acquisition Pro Forma Financial information
ro Forma Information (unaudited)
The following unaudited pro forma financial information for the years ended December 31, 2012 and 2011 presents, (i) the actual results of operations of our 2012 acquisitions and (ii) the combined results of operations for our company and our 2012 acquisitions as if those acquisitions had been completed on January 1, 2011, the first day of the comparable prior annual reporting period. The pro forma financial information considers principally (i) our company’s financial results, (ii) the unaudited historical financial results of our acquisitions, and (iii) select pro forma adjustments to the historical financial results of our acquisitions. Such pro forma adjustments represent principally estimates of (i) the impact of the hypothetical amortization of acquired intangible assets, (ii) the recognition of fair value adjustments relating to tangible assets, (iii) adjustments reflecting the new capital structure, including additional financing or repayments of debt as part of the acquisitions and (iv) the tax effects of the acquisitions and related adjustments as if those acquisitions had been completed on January 1, 2011. The unaudited pro forma financial information is not necessarily indicative of what our consolidated results of operations would have been had we completed the acquisition at the beginning of the comparable prior annual reporting period.
 
In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of our company: 
 
 
Revenue
 
Net Income (Loss)
 
 
(Unaudited)
(In thousands):
 
 
 
 
Actual from acquisition date to December 31, 2012
 
135,114

 
(6,795
)
2012 supplemental pro forma from January 1, 2012 to December 31, 2012(1)
 
1,759,471

 
47,770

2011 supplemental pro forma from January 1, 2011 to December 31, 2011(1)
 
1,731,228

 
108,406

 
(1) 
2012 supplemental pro forma net income was adjusted to exclude $1.5 million of acquisition-related costs incurred in 2012. 2011 supplemental pro forma net income was adjusted to include these charges.