Why Is a Candy Company Buying a Pet Hospital? Mars – VCA Acquisition

Mars, the maker of M&Ms and Snickers, will acquire VCA, a veterinary company, for $7.7 billion. VCA owns about 800 animal hospitals a lab business and dog day care franchises and has about $ 2 billion in revenue.

Although it may seem strange for a candy company to acquire a pet company, Mars already owns 39 petcare brands including IAMS, Pedigree and Whiskas and the acquisition will make the petcare division the company’s largest. The deal also makes sense for Mars’ long-term growth. The company, like many packaged good companies, is facing declining sales as many consumers today prefer healthy, fresh foods over packaged goods. While the CPG market may be in decline, fortunately, the petcare market is growing. In 2015, $35 billion were spent on vet care in the U.S.

Identify the Right Market for Growth

The transaction illustrates how finding the right market for growth can set you up for long-term success. For Mars, the acquisition of VCA is an opportunity to capitalize on a booming sector.

Many companies, when pursuing mergers and acquisitions think about a list of companies to buy and don’t spend much time analyzing the market. Unfortunately, this may mean acquiring a company that despite being a winner in today, is in a declining market.

Take the time to conduct a market analysis to explore the best opportunities for your company.  When faced with stagnation or contraction in your current market, you can use strategic acquisitions to pivot into a new high-growth market to ensure your long-term success.

What Business Are You Really In?

Another lesson from this transaction is the importance of really understanding your business. It’s easy to go with the most obvious choice when defining our business. If Mars simply stopped short and said “we are a candy company,” this deal would never have been executed. What’s worse, Mars could be facing serious challenges since demand for packaged goods is declining.

It’s important to take a step back and look at the big picture when you think about growing your business. What is your business really about? Don’t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.

Photo credit: Leonid Mamchenkov via Flickr cc
{"cc_re__cc_re__cc_by_2_0": ["nk about growing your business. What is your business <em>really </em>about? Don\u2019t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.</p>\n<h6>Photo credit: <a class=\"owner-name truncate\" title=\"Go to Leonid Mamchenkov's photostream\" href=\"https://www.flickr.com/photos/mamchenkov/146298779/\" target=\"_blank\" data-track=\"attributionNameClick\" data-rapid_p=\"29\">Leonid Mamchenkov</a>\u00a0via <a href=\"http://flickr.com\" target=\"_blank\">Flickr </a><a href=\"https://creativecommons.org/licenses/by/2.0/\" target=\"_blank\">cc</a></h6>\n<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-buttons\"><a  class=\"mashicon-facebook mash-large mash-center mashsb-noshadow\" href=\"https://www.facebook.com/sharer.php?u=http%3A%2F%2Fsuccessfulacquisitions.net%2Fwhy-is-a-candy-company-buying-a-pet-hospital-mars-vca-acquisition%2F\" target=\"_blank\" rel=\"nofollow\"><span class=\"icon\"></span><span class=\"text\">Share</span></a><a  class=\"mashicon-twitter mash-large mash-center mashsb-"], "copyright__copyright__copyright": ["imply stopped short and said \u201cwe are a candy company,\u201d this deal would never have been executed. What\u2019s worse, Mars could be facing serious challenges since demand for packaged goods is declining.\n\nIt\u2019s important to take a step back and look at the big picture when you think about growing your business. What is your business really about? Don\u2019t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.\n\nPhoto credit: Leonid Mamchenkov\u00a0via Flickr cc", "imply stopped short and said \u201cwe are a candy company,\u201d this deal would never have been executed. What\u2019s worse, Mars could be facing serious challenges since demand for packaged goods is declining.\n\nIt\u2019s important to take a step back and look at the big picture when you think about growing your business. What is your business really about? Don\u2019t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.\n\nPhoto credit: Leonid Mamchenkov\u00a0via Flickr cc", "imply stopped short and said \u201cwe are a candy company,\u201d this deal would never have been executed. What\u2019s worse, Mars could be facing serious challenges since demand for packaged goods is declining.\n\nIt\u2019s important to take a step back and look at the big picture when you think about growing your business. What is your business really about? Don\u2019t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.\n\nPhoto credit: Leonid Mamchenkov\u00a0via Flickr cc", "imply stopped short and said \u201cwe are a candy company,\u201d this deal would never have been executed. What\u2019s worse, Mars could be facing serious challenges since demand for packaged goods is declining.\n\nIt\u2019s important to take a step back and look at the big picture when you think about growing your business. What is your business really about? Don\u2019t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.\n\nPhoto credit: Leonid Mamchenkov\u00a0via Flickr cc", "imply stopped short and said \u201cwe are a candy company,\u201d this deal would never have been executed. What\u2019s worse, Mars could be facing serious challenges since demand for packaged goods is declining.\n\nIt\u2019s important to take a step back and look at the big picture when you think about growing your business. What is your business really about? Don\u2019t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.\n\nPhoto credit: Leonid Mamchenkov\u00a0via Flickr cc", "imply stopped short and said \u201cwe are a candy company,\u201d this deal would never have been executed. What\u2019s worse, Mars could be facing serious challenges since demand for packaged goods is declining.\n\nIt\u2019s important to take a step back and look at the big picture when you think about growing your business. What is your business really about? Don\u2019t understate the power of this simple question. Your answer will impact the trajectory of growth you choose.\n\nPhoto credit: Leonid Mamchenkov\u00a0via Flickr cc"]}