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Acquisition of Allivet, Inc.
 6 Months Ended
Jun. 28, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisition of Allivet, Inc. Acquisition of Allivet
On December 30, 2024, the Company completed its acquisition of Allivet, an online pet pharmacy. Pursuant to the agreement governing the Transaction, the Company acquired 100% of the equity interest in Allivet for a purchase price of $135.0 million, which excludes adjustments for working capital, acquired cash, and other transaction related payments. The acquisition was financed with cash-on-hand from the balance sheet.

Preliminary Allocation of the Purchase Price

The Company has applied the acquisition method of accounting for the Allivet acquisition, in accordance with ASC 805 “Business Combinations,” with respect to the identifiable assets and liabilities of Allivet which have been measured at estimated fair value as of the date of the business combination.

The aggregate purchase price noted above was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date, primarily using Level 2 and Level 3 inputs. Level 2 and Level 3 inputs are described in further detail in Note 2 to the Consolidated Financial Statements. These fair value estimates represent management’s best estimate of future cash flows (including sales, cost of sales, income taxes, etc.), discount rates, competitive trends, market comparables, and other factors. Inputs used were generally determined from historical data supplemented by current and anticipated market conditions and growth rates.

Although the determination of the preliminary fair values is substantially complete, certain fair value estimates are based on preliminary information and are subject to change during the measurement period, which ends once the Company has determined that it has obtained all necessary information that existed as of the acquisition date or has determined that such information is unavailable and cannot extend beyond one year from the acquisition date. At June 28, 2025, the fair values that
are based on preliminary information relate primarily to intangible assets, property and equipment, leases, inventory, and certain working capital adjustments. The amount of consideration transferred that exceeds the fair value of the identifiable assets, net of liabilities, is recorded as goodwill, which is indicative of the expected synergies the acquisition of Allivet will bring to the Company’s portfolio offering for companion animal, equestrian, and livestock customers, and the additional growth opportunities expected to open up as a result of acquiring Allivet.

The purchase consideration and preliminary estimated fair value of Allivet’s net assets acquired on December 30, 2024 are shown below (in thousands):
Preliminary allocation of the purchase price
Fair value of assets acquired
Cash and cash equivalents$2,905 
Inventories18,227
Prepaid expenses and other current assets4,635
Property and equipment10,779
Operating lease right-of-use assets3,124
Identifiable intangible assets26,500
Total assets acquired66,170 
Less: liabilities assumed
Accounts payable11,227
Other accrued expenses3,037
Current portion of operating lease liabilities728
Deferred income taxes7,524
Operating lease liabilities, less current portion1,649
Other long-term liabilities45
Total liabilities assumed24,210 
Goodwill100,882
Total fair value of consideration transferred$142,842 

Transaction costs related to the Allivet acquisition were expensed as incurred and are included in the selling, general, and administrative expenses in the Consolidated Statements of Income.
The results of operations of Allivet have been included in the Consolidated Financial Statements since the date of the acquisition.