
4.	Acquisitions

The table below reflects the activity related to the acquisitions and dispositions of our animal hospitals and laboratories during the nine months ended September 30, 2013 and 2012, respectively:



	Nine Months Ended September 30,
Animal Hospitals:	2013		2012
Animal Hospital acquisitions, excluding Associate Veterinary Clinics (1981) LTD ("AVC")	14		24
Acquisitions, merged	(2	)	(4	)
AVC acquisition	—		44
Sold, closed or merged	(15	)	(4	)
Net (decrease) increase	(3	)	60

Laboratories:
Acquisitions	1		—
Created	—		2
Net increase	1		2


4.	Acquisitions, continued

Animal Hospital and Laboratory Acquisitions, excluding 2012 acquisition of AVC

The following table summarizes the aggregate consideration for our independent animal hospitals, excluding AVC, and one laboratory acquired during the nine months ended September 30, 2013 and 2012, respectively, and the preliminary allocation of the acquisition price (in thousands):



	Nine Months Ended September 30,
	2013			2012
Consideration:
Cash	$	39,640		$	51,744
Cash paid to debt holders	2,360			—
Holdbacks	892			1,475
Earnout contingent consideration	1,120			934
Fair value of total consideration transferred	$	44,012		$	54,153

Allocation of the Purchase Price:
Tangible assets	$	13,494		$	1,995
Identifiable intangible assets	12,774			9,184
Goodwill ⁽¹⁾	32,557			42,974
Other liabilities assumed	(9,407		)	—
	$	49,418		$	54,153
Noncontrolling interest	(5,406		)	—
Total	$	44,012		$	54,153

____________________________

⁽¹⁾We expect that $12.9 million and $40.0 million of the goodwill recorded for these acquisitions, as of September 30, 2013 and 2012, respectively, will be deductible for income tax purposes.

The allocation of the purchase price is preliminary, because certain items have not been completed or finalized, including but not limited to, the valuation of tangible and intangible assets.

In addition to the purchase price listed above, we made cash payments for real estate acquired in connection with our purchase of animal hospitals totaling $1.2 million for the nine months ended September 30, 2013. There were $1.6 million in cash payments made for real estate for the nine months ended September 30, 2012.

2012 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 additional investments in AVC facilitates 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 condensed, consolidated financial statements reflect the operating results of AVC since January 31, 2012.


4.	Acquisitions, continued

The AVC investment accounting was finalized during the first quarter of 2013. The following table summarizes the total investment and the final allocation of the investment in AVC (in thousands):



Consideration:
Cash	$	48,819
Cash paid to debt holders	25,915
Fair value of total consideration transferred, net of cash acquired	$	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, trademarks and covenants-not-to-compete. The weighted-average amortization period for total identifiable intangible assets is approximately six years. This consists of amortization periods of five years for customer-related intangible assets, ten years for trademarks and three years for covenants-not-to-compete.

⁽²⁾As of September 30, 2013, we expect that approximately $362,000 of the goodwill recorded for this acquisition will be deductible for income tax purposes.

AVC is reported within our Animal Hospital reportable segment.

2012 ThinkPets, Inc ("ThinkPets")

On February 1, 2012, we acquired a 100% interest in ThinkPets for $21 million, payable by delivery of 473,389 shares of VCA common stock and $10.5 million in cash. Subsequent to the acquisition, we merged the operations of ThinkPets with Vetstreet. Our condensed, consolidated financial statements reflect the operating results of ThinkPets since February 1, 2012 reported within our "All Other" category in our segment disclosures.


4.	Acquisitions, continued

The ThinkPets acquisition accounting was finalized during the first quarter of 2013. The following table summarizes the total purchase price and the final 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, net of cash acquired	$	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 total identifiable intangible assets is approximately eight years. This consists of amortization periods of nine years for customer-related intangible assets, four years for technology contracts and two years for trademarks.

⁽²⁾As of September 30, 2013, we expect that approximately $821,000 of the goodwill recorded for this acquisition will be deductible for income tax purposes.