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Acquisition of VIP Petcare
 6 Months Ended
Jun. 27, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisition of VIP Petcare Acquisition of VIP Petcare
On May 28, 2026, the Company completed its acquisition of VIP Petcare, the veterinary services business of PetIQ. Pursuant to the agreement governing the transaction, the Company acquired 100% of the equity interest in VIP Petcare for a purchase price of $133.8 million, which excludes adjustments for working capital, acquired cash, and other acquisition related payments.

Preliminary Allocation of the Purchase Price

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

The aggregate purchase price 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 27, 2026, the fair values that
are based on preliminary information relate primarily to intangible assets, deferred income taxes, 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 VIP Petcare will bring to the Company’s portfolio offering for companion animal customers and the additional growth opportunities expected as a result of acquiring VIP Petcare. The goodwill recorded is not deductible for tax purposes.

The purchase consideration and preliminary estimated fair value of VIP Petcare’s net assets acquired are shown below (in thousands):

Preliminary Allocation of the Purchase Price
Fair value of assets acquired
Cash and cash equivalents$524 
Inventories4,710
Prepaid expenses and other current assets4,627
Property and equipment11,182
Operating lease right-of-use assets3,910
Identifiable intangible assets41,200
Total assets acquired66,153 
Less: liabilities assumed
Accounts payable6,139
Other accrued expenses9,371
Current portion of operating lease liabilities1,982
Deferred income taxes8,855
Operating lease liabilities, less current portion2,130
Other long-term liabilities8,169
Total liabilities assumed36,646 
Goodwill100,856
Total fair value of consideration transferred$130,363 

$9.5 million in acquisition costs related to the VIP Petcare 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 VIP Petcare have been included in the Consolidated Financial Statements since the date of the acquisition.