Mars Inc. is taking over diagnostic solutions provider Heska Corp. (Nasdaq: HSKA) in a deal worth $1.30 billion, as the leader in pet food aims to broaden its animal diagnostics operations. Following the news, Heska closed Tuesday’s trading session at $116.90, almost unchanged from the prior close. The stock had fluctuated between $57 and $149 in the past year.
As per the definitive agreement, specifically, Mars will shell out $120 per share to Heska’s shareholders, reflecting a premium of 22.90% from last Friday’s close. The price also represents a 38% premium over Heska’s 60-day volume-weighted average trade price. Both companies anticipate the deal to be concluded in the second half of 2023.
The boards of directors of both firms have unanimously endorsed the takeover deal. The takeover deal still requires regulatory approval.
While Lazard acted as the financial consultant for Mars, legal advice was provided by Skadden, Arps, Slate, Meagher & Flom LLP. In the case of Heska, BofA Securities Inc and Piper Sandler & Co. acted as financial advisors. Legal advice was provided by Gibson, Dunn & Crutcher LLP.
Mars, which owns Pedigree dog food, expects a huge increase in demand for pet food as pet ownership is on the rise.
Upon conclusion of the transaction, Heska will come under Mars Petcare, an objective-led international business catering to pets through a range of products and services within the realm of animal well-being and diagnostics.
The takeover will permit the science and diagnostics unit of Mars Petcare, which currently encompasses Antech Diagnostics, to broaden its diagnostic solutions and globally offer to screen (non-laboratory-based) diagnostics to the international pet healthcare fraternity.
Nefertiti Greene, president of Mars Petcare, Science & Diagnostics, stated that the “merger serves to unify enterprises that complement each other and share a robust tactical and cultural alignment, which supports our common goal of improving the lives of pets.”
Kevin Wilson, CEO and president of Heska, opined that the company’s technological advances will be accessible to a larger number of veterinarians, resulting in improved health and longevity for more pet owners.
The acquisition news is expected to keep Heska’s stock slightly bullish in the short term.
The historical price chart indicates that the stock of Heska is rising after consolidating at 80 levels. The next resistance is anticipated only near 135. Additionally, the stock is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we anticipate the stock of Heska to remain in an uptrend in the next few trading sessions.
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