Business Acquisition

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Business Combination Disclosure Text Block

On December 31, 2012, MWI Veterinary Supply Co. (“MWI Co.”) purchased substantially all of the assets of Prescription Containers Inc. (“PCI Animal Health”) for $17,006. The purchase price remains subject to a post-closing working capital adjustment. PCI Animal Health was a distributor of companion animal health products to veterinary practices, primarily in the Northeastern United States. The intangible asset acquired in the acquisition is for customer relationships and has a useful life of 10 years. The amount recorded in goodwill is expected to be 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. We adjusted those valuations during the three months ended March 31, 2013 as a result of further review of these estimates and assumptions. The fair value assigned to the purchased intangible related to customer relationships decreased by $1,190 with a corresponding adjustment to the carrying value of goodwill. The related impact on amortization recognized from that date is insignificant to the consolidated statements of income.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.

On October 31, 2011, MWI Co. purchased substantially all of the assets of Micro Beef Technologies, Ltd. (“Micro”) for an aggregate amount of $60,878, consisting of $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 at closing 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. 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. The amount recorded in goodwill is deductible for tax purposes over 15 years.

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

	2013		2012
Cash	$	-	$	1
Receivables		3,548		22,374
Inventories		1,911		27,701
Other current assets		-		105
Property and equipment		-		8,882
Goodwill		9,225		12,473
Intangibles		4,780		15,760
Investments		-		199
Total assets acquired		19,464		87,495
Accounts payable		2,458		25,026
Accrued expenses and other liabilities		-		1,591
Total liabilities assumed		2,458		26,617
Net assets acquired	$	17,006	$	60,878

The following table presents supplemental pro forma information as if the acquisition of Micro had occurred on October 1, 2011 for the six months ended March 31, 2012:

	Unaudited Pro Forma Consolidated Results
	Six months ended March 31, 2012
Revenues		$	991,001
Net Income		$	26,468

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. Additionally, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company.