Zacks_Analysts' Blog : MWIV Veterinary Buys Nelson - Analyst Blog

MWI Veterinary Supply Inc. (MWIV), a leading distributor of animal health products for veterinarians across the US and UK has taken a step forward to expand its veterinary product range. The company recently acquired Nelson Laboratories for $7 million. Nelson, a distributor of animal health products, recorded revenues of $35 million for calendar year 2010.

In order to increase its market share further, MWIV has taken various initiatives over the past few years. The company has acquired many companies to either reach out to areas where it has low market share or for targeting new areas.

With the acquisition of UK based Centaur Services in 2010, an animal health products supplier, MWIV strengthened its UK operations. During the first quarter of fiscal 2011, 26.5% of the revenue came from Centaur.

MWIV distributes more than 30,000 products consisting of pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, supplies, veterinary pet food and nutritional products. Also it offers a variety of value-added services, including online ordering, pharmacy fulfillment, in-clinic inventory management, equipment procurement consultation, educational seminars and pet cremation service.

During the last reported quarter, the company witnessed a robust 55.1% year over year growth in sales.  Approximately 34% of product sales were generated over the Internet and two-thirds of MWIV’s total revenues are generated from sales of companion animal products.

However the company faces stiff competition from key players like Henry Schein (HSIC) and Animal Health International (AHII). Also its business in US and UK is under tremendous pressure as economic uncertainty has impacted both the companion animal and production animal markets with tightening credit markets.

We presently have Neutral recommendation on MWIV.