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Welcome to The Bird Bath, a weekly news podcast. Join our host, Ryan Leech, as he highlights the latest news and trends in the evolving world of pet health. Stay tuned!
You're listening to The Birdbath. Welcome back to The Birdbath. Each week, we scrape the surface of the news you need to know, so let's get into it. We are just a little over a week out from Christmas, and our next episode's gonna come out on Christmas Eve. So, hopefully, we'll get something fun planned for that to be a little stocking stuffer, but we've got some awesome and big stories to hit on this week.
Speaker 1:Our top story this week is that Patterson Companies has announced a definitive agreement to be acquired by Patient Square Capital. Patient Square Capital is a health care centric private equity group with about $11,000,000,000 of assets under management. The announcement states, Pattison shareholders will receive $31.35 in cash per share, representing an approximate 49% premium on their 30 calendar day volume weighted average price, which is a pretty standard figure that you look at when you're putting together the, price and the the share price of which people get paid out when a company is taken private, which is something that we keep talking about a lot. It's It's been, the the hot thing to do in 2024. The transaction here is expected to close in the Q4 of Patterson's fiscal 2025, but there are quite a few hurdles that need to get jumped through and hurdles to get jumped over and hoops to get jumped through and checks to be signed and and approvals to be made there, but the board did approve the process.
Speaker 1:So, it seems like it should be something good to see happen. Now now you're all probably very well aware of Patterson, but if you aren't, Patterson entered into the veterinary health industry after being in the dental space quite a few years when they made an acquisition of Weber Vets Veterinary in 2001, and then they expanded their business in 2015 with the acquisition of Animal Health International. The business has had a very large growth and continues to grow. And the thing that we're seeing a lot of is the distributors in the veterinary space continuing to be a big part of consolidation. They're getting consolidated more and more, so it's not surprising to see a company like Patterson, which has a huge animal health footprint and an even bigger dental footprint, go underneath a private equity wing.
Speaker 1:So another company, though, that people are talking about for, being taken private is Walgreens. Walgreens Boots Alliance, which is the formal name of Walgreens for us in America. They also own Boots, which is a UK pharmacy. There are talks that they're planned to be acquired by Sycamore Capital for $8,000,000,000. So we're looking at a $4,100,000,000 deal for Patterson and another $8,000,000,000 for Walgreens.
Speaker 1:Big numbers that are there. And, more and more is going to be expected to see for 2025. As we've talked about, private equity money is back and flooding into health care. So our last story was talking about things moving forward, but this is about something moving back. Merck sent out a letter to the veterinary cooperative members telling them that Merck is no longer going to be participating in a commercial relationship with TVC.
Speaker 1:In the email that, that was provided to the birdbath by a TVC member, the Merck letter says, beginning January 1, 2025, Merck Animal Health will no longer maintain a commercial relationship with TVC. This decision was made with the focus on building closer partnerships with individual veterinary hospitals. Our goal is to enhance our support and prioritize innovative product offerings that can lead to improved health outcomes for pets as well as better financial health for your practice. So they they hit on that. They also went through and outlined a few of the different things that would and wouldn't change.
Speaker 1:They wanted to let people know, at TVC that there'd be continued access to products, so they still are going to have their full service offerings. They can continue their enrollment in loyalty programs. They have new promotional offers that they're pushing out, and then they're putting out additional business resources. They rounded out the letter by saying, we recognize that TBC offers various benefits to its members, and we encourage you to continue your relationship with them as you see fit. Should you have any questions or need further details regarding these changes, please do not hesitate to reach out to your Merck animal health representative.
Speaker 1:So I didn't reach out to my Merck animal health representative because I don't have one, but I did reach out to the team at the Veterinary Cooperative, TBC. We had a chance to speak with Nick McCart, who's the president of TBC. And Nick said in an email response to us, Merck Animal Health has been an important partner to TBC in the past, including their support of TBC's launch of the Cooperative Pledge just this year. The pledge is a social contract that strengthens loyalty among TVC's independent veterinarians and reinforces the values of collaboration within our industry. I've heard from so many frustrated hospital members, those that own TVC.
Speaker 1:And although they are angered about Merck's decision to abandon TVC's mission to independent veterinarians, they remain grateful for the partners who continue to stand with us and energized by their commitment to our shared goals. The cooperative pledge is more than a commitment to one another. It's a promise to support the industry partners who support independence, who work together. TVC members know the strength of independence lies in standing together. We will continue to work against the forces that seek to divide independence and favor corporate hospital groups.
Speaker 1:So very strong words from Nick and the team at TVC. I also reached out to some other group purchasing organizations and did not have any verify that they had stopped a partnership or a collaboration with Merck. If you did, if you're part of a GPO that had the similar letter go to you, please let me know. But from what I understand, I've been told both sides of things, that they have sent out letters like this to other GPOs, but the GPOs additionally that I spoke to did not have the same experience. So tough stuff here.
Speaker 1:We're continuing to see the growth of large corporate practices. And it's something that if you're on the independent practice side, you saw this as a as a difficult move by a very large company to favor more direct relationship with the practices, and perhaps a reduction in the bargaining power of independent practices. While the larger groups, or if you're on the side of the pure capitalist view of things, this is, you know, larger groups had the opportunity to buy larger amounts. And perhaps Merck saw the cooperative or the GPO approach as being one purely of bargaining power that they were able to disrupt. Again, it's, something I think we'll continue to see more happen and more people discuss it over the next coming months.
Speaker 1:And, again, if you hear more about this or know more about this, please feel free to reach out. Now this story was kind of interesting. It's been 5 years since COVID 19 really shook the core of a lot of people across the globe, and VCA Antech has made an update to the one health framework. They they released their 6 step framework for companion animal public health collaboration. And it was work that they did around research and studies based on COVID 19 and the zoonotic infections and the issues that can happen there.
Speaker 1:So in the press release that the VCA and Antec put out together, they said, traditionally, pets have largely been ignored in public health surveillance, but we wanna change that. This is by doctor Anne Kimmerlein, who's a DVM and veterinary epidemiologist for VCA Animal Hospital. She said, thanks to the participation of our associates and their pets, we were able to show the impact that the private veterinary sector can have when we come together to address an emerging public health threat. Based on that initial work, we've created a framework for continued and expanded one health collaboration. Study, which was pretty cool and and just published this month, showed that they looked at households that had confirmed SARS CoV 2 infections in humans, and then the pets in those households were monitored for clinical signs of that same, strain.
Speaker 1:Samples were collected and tested, and they included 747 dogs and 253 cats. So I thought this was pretty cool just to hear about the work that was happening maybe that people knew about, but as we're going back and coming out of the COVID bubble and knowing that, there were things that came out of it and and there's some collaboration that, has been able to be found as well as new learning. So the results from the study indicated that pets can contract SARS CoV 2, which is the virus that carries the COVID 19 virus or illness. I know I'm getting in over my epidemiology head, so go ahead and fact check me on that, but you guys get where I'm going. The pets were able to contract this primarily through close contact with infected humans.
Speaker 1:In the study, they said while most pets showed mild or no symptoms, the study nonetheless underscored the recommendation for fenitive measures such as good hand hygiene around pets to minimize transmission risks. The findings also demonstrated the potential for pets to seroconvert and develop antibodies indicating the exposure to the virus. I know I got COVID, I think twice. I can't remember now exactly, but Walter, my big guy, was my go to cuddle buddy and actually kind of interesting to hear this because we were always curious about the transmission and the zoonotic diseases here. And, I remember my wife and I, when either one of us got COVID, the other one went off and had to sequester, but you did get a, a cuddle companion with 1 of our goldens.
Speaker 1:So very interesting to see this, and it's neat to see here that, VCA and Antech were doing some great work around this. I'll I'll be sure to link their 6 step framework. And please make sure to keep it in in mind. Hopefully, we don't come across another major outbreak of any national, global, universal epidemics. But, hopefully, if there is anything that comes our way, whether it's bird flu or anything else that comes out, this is gonna be a great way to focus on that one health framework.
Speaker 1:Our next story or our last story is a bit of an update on one that we hit on, a little bit ago about the ban on pet sales within, pet stores in New York state. Last week, the Pet Advocacy Network as well as some pet care businesses filed a lawsuit hoping to stop the ban from going into place. Well, that ban was struck down at the end of last week, and the effect went into place on Sunday, December 15th, just a couple days ago. The Pet Advocacy Network CEO, Mike Barber, responded to the ruling saying in part, tragically, instead of improving animal welfare, this puppy prohibition law will close licensed and regulated small businesses that have connected many New York families with the pet they love and create a black market for pets. It was, kind of the argument that was made against the ban was that in California, when they put a similar ban in place, reported, puppy scams have surged by 350%.
Speaker 1:The pet advocacy network says that, overall consumer protections have been lost as well as veterinarians have seen an increase in sick puppies because people are buying them from unregulated sources. So the lawsuit was struck down. The ban is in effect and in place, and I guess we'll now have a sample size of 2 states to see where this goes. If you wanna hear more on these and other stories, join us by subscribing to our substack. There's a link in the bio.
Speaker 1:And don't miss out on any episodes by subscribing and rating the show. For The Birdbath, I'm Ryan Leach. See you next week.