Business Acquisition

12 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Business Combination Disclosure Text Block

3.Business Acquisitions

On February 8, 2010, MWI Veterinary Supply Co. (“MWI Co.”) purchased all of the outstanding share capital of Centaur Services Limited (“Centaur”), based in the United Kingdom for a purchase price of $44,053, consisting of $42,053 in cash and $2,000 in a note payable due in one year. Subsequent to the acquisition of Centaur, we funded $2,047 to the pension plan as required by the terms of the share purchase agreement. The purchase price was reduced subsequent to the acquisition date by $1,868 as a result of a post-closing working capital and debt adjustment. Centaur is a supplier of animal health products to veterinarians in the United Kingdom. Centaur sells products to both the companion animal market and production animal market. The acquisition of Centaur has allowed us to expand into the international markets. We incurred $1,100 of direct acquisition-related expenses. The intangible assets acquired in the acquisition have estimated useful lives between 1 and 20 years, which include customer relationships, trade names and other intangible assets. The amount recorded in goodwill is not deductible for tax purposes.

On March 21, 2011, MWI Co. purchased substantially all of the assets of Nelson Laboratories Limited Partnership (“Nelson”) for $7,000 in cash. Nelson is a distributor of animal health products to over 1,100 veterinary practices, primarily in the Midwestern United States. This acquisition allows us to better serve our customers in this region of the United States. An intangible asset representing customer relationships acquired in the acquisition has an estimated useful life of 10 years. The amount recorded in goodwill is deductible for tax purposes over 15 years.

On October 31, 2011, MWI Co. purchased substantially all of the assets of Micro Beef Technologies, Ltd. (“Micro”) for $60,878, including $53,400 in cash and 94,359 shares of common stock valued at $7,158, which is the fair value of the common stock as of the date of acquisition and a working capital adjustment of $320. The $53,400 paid in cash as consideration of Micro was funded with borrowings under our Credit Agreement (as defined in Note 7) as then in effect. Micro is a value-added distributor to the production animal market, including the distribution of micro feed ingredients, pharmaceuticals, vaccines, parasiticides, supplies and other animal health products. Micro also is a leading innovator of proprietary, computerized management systems for the production animal market. We incurred $1,104 of direct acquisition-related and integration expenses. The intangible assets acquired in the acquisition include technology, customer relationships, trade name and covenant not to compete. The useful life of the amortizing intangible assets ranges from 5 years to 17 years. Trade name is a non-amortizing intangible asset. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded as part of the acquisition of Micro includes the expected synergies that we believed would result from this acquisition. The amount recorded in goodwill is deductible for tax purposes over 15 years. The fair values assigned to the tangible and intangible assets acquired and liabilities assumed are based on management's estimates and assumptions as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of each acquisition, which may be adjusted during the measurement period as defined in Accounting Standards Codification (“ASC”) 805. These purchase price allocations are based on a combination of valuations and analyses.

		2012		2011		2010
Cash	$	1	$	-	$	674
Receivables		22,374		4,041		32,371
Inventories		27,701		3,594		17,830
Other current assets		105		-		480
Property and equipment		8,882		1,900		5,275
Investments		199		-		-
Goodwill		12,473		1,823		9,483
Intangibles		15,760		140		17,658
Total assets acquired		87,495		11,498		83,771
Accounts payable		25,026		4,498		25,811
Accrued expenses		1,591		-		5,299
Other liabilities		-		-		10,476
Total liabilities assumed		26,617		4,498		41,586
Net assets acquired	$	60,878	$	7,000	$	42,185

The following table presents information for Micro that is included in our consolidated statements of income from the acquisition date of October 31, 2011 through the fiscal year endedSeptember 30, 2012:

	Micro's operations included in MWI's results
			Fiscal year ended September 30, 2012
Revenues		$	246,624
Net Income		$	4,089

The following table presents supplemental pro forma information for the Company as if the acquisition of Micro had occurred on October 1, 2011 for the period ended September 30, 2012, on October 1, 2010 for the period ended September 30, 2011 and on October 1, 2009 for the period ended September 30, 2010 (unaudited):

		Unaudited Pro Forma Consolidated Results
		Fiscal year ended September 30,
		2012		2011		2010
Revenues	$	2,097,076	$	1,793,672	$	1,408,302
Net Income	$	53,571	$	45,769	$	35,190

The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations would have been had we completed the acquisition on October 1, 2011, October 1, 2010 and on October 1, 2009. Additionally, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company.