Related Party Transactions

12 Months Ended

Dec. 31, 2016



3.	Related Party Transactions

a. Related Party Vendors

Frank Reddick joined our Company as a director in February 2002 and is a partner in the law firm of Akin Gump Strauss Hauer & Feld, LLP (“Akin”). Akin provided legal services to us during 2016, 2015 and 2014. The amount paid by our Company to Akin for these legal services was approximately $2.5 million, $1.5 million and $0.9 million in 2016, 2015 and 2014, respectively.

b. Transactions with VetSource

In 2006, we entered into a pharmacy distribution agreement with Strategic Pharmaceutical Solutions, Inc. (“VetSource”) a start-up pharmacy distribution company. Pursuant to the terms of this agreement we are entitled to one representative on the VetSource Board of Directors. Under the agreement we promote the use of VetSource as the preferred provider of pharmaceutical products to VCA animal hospitals. The agreement has a five-year term and will renew for one year terms unless either party provides written notice of termination to the other party at least 120 days prior to expiration of the then current



3.	Related Party Transactions, continued

term. The amount paid by our Company to VetSource for pharmaceutical products was $7.0 million, $6.0 million and $5.7 million in 2016, 2015 and 2014, respectively. We own 39.3% of the outstanding preferred stock of VetSource.

On October 24, 2013, we entered into a $1.2 million revolving credit agreement with VetSource in the form of a promissory note. Our commitment under the revolving credit agreement is to loan up to $0.5 million, equitable to our 39.3% pro rata share in VetSource. As of December 31, 2016, we have no outstanding loan to VetSource.

c. Transactions with Vetstreet

On December 31, 2015, our Company sold substantially all of the assets of Vetstreet Inc., formerly known as MediMedia Animal Health LLC ("Vetstreet") to a subsidiary of Henry Schein, Inc.. Concurrent with the sale of Vetstreet, we purchased a 19.9% interest in the continuing Vetstreet business for $9.6 million, which is being accounted for under the equity method of accounting for investments in common stock. The amount paid by our Company to Vetstreet for marketing related services in 2016 was $2.5 million.