Mars Expands Pet-Care Business With Purchase of Veterinary Firm AniCura

Mars Inc. is pushing further into the lucrative business of pet care, saying on Monday it had agreed to buy a European veterinary operator.

The deal to buy AniCura from European buyout firm Nordic Capital values the business at close to €2 billion ($2.36 billion) including debt, according to a person familiar with the matter.

It marks the latest in a series of deals in pet care by privately held Mars, which has long owned a substantial pet-food business dating back to 1935, with brands such as Iams, Pedigree and Royal Canin.

Last year Mars bought veterinary and dog day-care company VCA Inc. for $7.7 billion. And just last week, Mars agreed to buy U.K. veterinary-services provider Linnaeus Group Ltd. from private-equity firm Sovereign Capital Partners.

While best known for its candy bar and other chocolate and gum brands, pet care contributes most of Mars’s roughly $35 billion in annual revenue. The company’s push to expand its footprint in the high-margin business of feeding and caring for pets comes as sales of traditional packaged foods, including its snacks products, are showing only modest growth.

Mars, which is still owned by its founder’s descendants, says pet care is a faster-growing industry than human food.

Pet owners in developed markets are cultivating stronger emotional bonds with their dogs and cats, motivated by later marriages, smaller families and elevated divorce rates, according to analysts. As more people buy fancier, organic food for themselves, they are doing the same for their pets. Consumers also are seeking more varied medical care for their pets such as cancer treatments for their cats and reconstructive surgeries on their dogs’ knees.

To capitalize on this, Mars in March launched a $100 million venture capital fund aimed at backing startups focused on all things pet-related, from nutrition to genetics. In April it acquired Opitgen LLC, a genetic diagnostics company specializing in inherited eye disorders in dogs.

AniCura offers preventive and basic health care but also advanced diagnostics, internal medicine, intensive care, surgery and orthopedics. The company also provides rehabilitation, physiotherapy and dietary advice and sells some pet food.

It has 200 clinics with 4,000 employees in places like Austria, Germany, the Netherlands, Scandinavia and Switzerland. Its annual revenue is about 3.3 billion kronor ($378.9 million).

As a European-based buyout firm, Nordic Capital focuses its investments across a range of sectors including health care, financial services and consumer and retail. It closed its latest fund last month, raising €4.3 billion ($5.06 billion).

The AniCura deal represents a big win for Nordic, which acquired the operation in 2014 for around €220 million, including debt, according to the person familiar with the matter. Under Nordic’s ownership, AniCura increased the number of clinics it operates fourfold. Today, the business cares for two million animals annually, up from 500,000 in 2014.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com and Ben Dummett at ben.dummett@wsj.com

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