Acquisitions (Tables)

9 Months Ended

Sep. 30, 2011

Acquisitions [Abstract]

Summary of acquisitions of animal hospitals and laboratories

Animal Hospitals:
Animal Hospital acquisitions, excluding BrightHeart	10
Acquisitions, merged	(1	)
BrightHeart (1)	9
Sold, closed or merged	(6	)
Total	12
Laboratories:
Acquisitions	1
Created	1
Total	2

⁽¹⁾  BrightHeart Veterinary Centers (“BrightHeart) was acquired on July 11, 2011.

Summary of Purchase price and allocation of the purchase price

Consideration:
Cash	$	19,499
Holdback		800
Fair value of total consideration transferred	$	20,299
Allocation of the Purchase Price:
Tangible assets	$	446
Identifiable intangible assets		3,620
Goodwill (1)		16,233
Total	$	20,299

⁽¹⁾  We expect that $16.2 million, of the goodwill recorded for these acquisitions as of September 30, 2011 will be fully deductible for income tax purposes.

Consideration:
Cash	$	23,490
Cash paid to holders of debt		26,048
Contingent consideration		481
Fair value of total consideration transferred	$	50,019
Allocation of the Purchase Price:
Tangible assets	$	15,985
Identifiable intangible assets (1)		7,335
Goodwill (2)		47,431
Other liabilities assumed		(20,732	)
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 expect that all of the goodwill related to the BrightHeart acquisition recorded as of September 30, 2011 will be fully deductible for income tax purposes.

Consideration:
Cash	$	146,420
Allocation of the Purchase Price:
Tangible assets	$	5,952
Identifiable intangible assets (1)		45,810
Goodwill (2)		99,087
Other liabilities assumed		(4,429	)
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 expect that all of the goodwill related to the Vetstreet acquisition recorded as of September 30, 2011 will be fully deductible for income tax purposes.

Business Acquisition Pro Forma Financial information

	Revenue		Net Income
(In thousands):	(Unaudited)
Actual from July 1, 2011 to September 30, 2011	$	19,318	$	1,108
2011 supplemental pro forma from July 1, 2011 to September 30, 2011 (1)	$	389,648	$	30,624
2010 supplemental pro forma from July 1, 2010 to September 30, 2010	$	383,333	$	27,639
Actual from January 1, 2011 to September 30, 2011	$	23,341	$	1,616
2011 supplemental pro forma from January 1, 2011 to September 30, 2011 (1)	$	1,173,830	$	99,611
2010 supplemental pro forma from January 1, 2010 to September 30, 2010 (1)	$	1,117,245	$	87,375

⁽¹⁾  The July 1, 2011 to September 30, 2011 and January 1, 2011 to September 30, 2011 supplemental pro forma net income was adjusted to exclude $1.5 million and $2.0 million, respectively of acquisition-related costs incurred in 2011. The January 1, 2010 to September 30, 2010 supplemental pro forma net income was adjusted to include the $2.0 million of year-to-date acquisition-related costs.