ACQUIRE - Facebook Acquires TBH Application

According to industry sources, Facebook paid just under US$100 million for the 'tbh' app but they have not released the details. 

Several weeks ago Facebook acquired social media application 'tbh'. The months old application has already attracted 5 million users (downloads) who have sent more than a billion messages. The application reportedly has 2.5 million active daily users.

The application allows users to anonymously answer questions about their friends, fellow employees and other parties in their network. The 'tbh' application works by giving users a description, such as "always the best dressed," then allowing them to anonymously choose which person meets that description from a small set of names in their network. By keeping the activity structured, 'tbh' expects to maintain positive conversations, instead of regressing into bullying as other anonymous apps have done.

It is unusual for Facebook to acquire an application that is focused on anonymous activity. However, the social media giant is seeking new ways to reach young users who are fickle but savvy and often responsible. While this cohort may not be as loyal as others they can be engaged to communicate in different ways that attract their interest. 

In her statement Vanessa Chan, a Facebook spokesperson, said, “TBH and Facebook share a common goal -- of building community and enabling people to share in ways that bring us closer together. We’re impressed by the way TBH is doing this by using polling and messaging, and with Facebook’s resources TBH can continue to expand and build positive experiences.”

The staff of 'tbh' will move into Facebook infrastructure and use FB resources but maintain their autonomy from other FB activities. 

WHAT YOU NEED TO KNOW:  Facebook’s advertising business model requires people to use their real identities, make clear what they like or don’t like and have their social behaviours attached to their identity. This acquisition seems to show the rising value of acquiring an ecosystem with lots of activity and widespread appeal even if it doesn't fit the old paradigm. Perhaps a new recipe is required to grow a giant but mature social media play.

ACQUIRE - Target Invests $75 Million in Online Startup Casper

Target has become the latest large brick and mortar retailer to take major steps to strengthen their ecommerce profile and appeal to young consumers.

The company recently invested an estimated $75 million in online mattress startup Casper, whose “bed-in-a-box” strategy is tailored to millennials.

The deal will have Casper products exclusively in Target stores starting June 18th.

“At Target, we strive to bring guests amazing new products and exciting partnerships,” says Jill Sando, senior vice president, merchandising, home. “We love Casper’s brand and innovative products—and we really love the idea of giving our guests a simple way to get a better night’s sleep, with everything they need in one convenient place.”

A Recode report, citing unnamed sources, stated Target had initially attempted to purchase the company for $1 billion.

The Casper partnership follows deals Target brokered - with Bevel and Harry’s, two subscription-based online brands - that also resulted in exclusive deals to be the only mass retailer to carry their products.

“The cool factor Target had ten years ago is today captured by these niche brands, and Target is hoping to capture some of their luster with these investments and partnerships,” said eMarketer analyst Yory Wurmser.

These steps by Target are in concert with another large retailer, and one of their major competitors, Walmart.

Walmart recently acquired Jet.com followed by ShoeBuy and Moosejaw - all strong online retailers whose acquisitions have resulted in increased sales and revenue for the retail giant.

Brick and mortar retailers are faced with a rapidly growing global trend in mobile and ecommerce, along with a young customer base growing up in an environment dominated by the Internet of Things.

They are responding by purchasing or partnering with businesses that have a large online subscriber base, outstanding online customer service, and/or strong online retail sales, to help maintain a competitive edge.

BUSINESS - PetMatrix to be Acquired by Spectrum Brands

Spectrum Brands Holdings, Inc. announced it has signed a definitive agreement to acquire privately owned PetMatrix, LLC, a leading and rapidly growing manufacturer and marketer of rawhide-free dog chews.

Financial terms of the accretive, all-cash transaction were not disclosed.

"PetMatrix will immediately strengthen our pet care portfolio with its well-established and growing brands catering to healthy alternative pet trends," Andreas Rouvé, Chief Executive Officer of Spectrum Brands Holdings, said in a release.

"We expect it to further solidify Spectrum Brands as a leader in the North American dog chews category and to provide compelling white space revenue opportunities in Europe, Latin America and Asia." 

Spectrum Brands products include Nature's Miracle, FURminator, Littermaid, Dingo, Tetra and Marineland.

Founded in 2008, PetMatrix provides a broad portfolio of innovative, rawhide-free dog chews across its two flagship brands – DreamBone® and SmartBones®.

PetMatrix products are sold to mass merchandisers, food and drug stores, and pet specialty stores and the company is on pace to achieve approximately $75 million in sales in calendar year 2017.

"The PetMatrix team and I are excited to join Spectrum Brands," said Mark Stern, founder and CEO of PetMatrix. "This partnership will bring additional resources to our company and allow us to execute our plans for continued growth in the coming years."

The acquisition, which has been approved by Spectrum Brands' Board of Directors, is expected to close by the end of May 2017.

Previous acquisitions by Spectrum Brands include the European business of Iams and Eukanuba, as well as Proctor & Gamble’s European pet care business.

BUSINESS - Petco Acquires PetCoach

Petco recently announced that it acquired PetCoach, a digital services company that connects pet parents with veterinary professionals, trainers and other experts for free personalized answers and advice.

This follows the acquisition of pet supplies and pet medicine e-retailer Drs. Foster & Smith in 2014.

Both purchases show the importance of online retail and services for brick and mortar stores like Petco.

Some may find the PetCoach acquisition puzzling for a profit-based organization that is focused on the bottom line.

But one thing recent corporate acquisitions has demonstrated is the importance of elements like an online subscriber base and social innovation.

Providing pet owners answers to the medical and behaviour questions they may have helps build relationships and customer loyalty - something that is extremely valuable in today’s digital world.

"Nurturing powerful relationships for better lives together is at the heart of all we do," said Petco CEO, Brad Weston.

"As we continue evolving our value proposition – helping pet owners wherever and however they want to improve the health and well-being of their pet -- we believe that an entrepreneurial and digital leader of Brock's caliber will help Petco exceed the ever-changing digital expectations of the modern pet parent."

As part of the acquisition, Brock Weatherup, PetCoach co-founder and CEO, joins the national pet specialty retailer as Executive Vice President, Strategic Innovation & Digital Experience.

In this new role, Weatherup will be responsible for driving Petco's growth through innovation and enterprise-wide, consumer-focused digital initiatives.

"We are thrilled to be joining a talented team and a leading company like Petco. Connecting even more pet parents and their pets to the personalized tools, resources, veterinarian advice and products they need is exciting," said Weatherup.

"Having had the opportunity to lead and build several startups, we are ready to bring the speed, innovation, competitiveness and scrappiness of entrepreneurialism to Petco, while leveraging their scale, infrastructure, resources and strong brand."

Petcoach reportedly has more than 150,000 unique monthly visitors and receives several thousand health questions each month.

 

BUSINESS - PetSmart to Acquire Chewy Inc.

PetSmart, Inc. announced it has entered into a definitive agreement to acquire the online pet retailer Chewy, Inc.

The acquisition accelerates the execution of PetSmart’s strategy and is a critical milestone in its journey to be the most convenient, best-in-class pet retailer.

Chewy is one of the leading online retailers of pet products and has seen major growth since it was founded by Ryan Cohen and Michael Day in 2011.

With the recent upgrade to the PetSmart website that boosts e-commerce, it’s clear the acquisition is part of a plan to grow the online portion of their business.

The combination of PetSmart and Chewy will enhance both companies’ capabilities and reach, offering a wide selection of pet products and services available both in-store and online in North America.

Michael Massey, president and chief executive officer of PetSmart said in a release, “We are focused on improving our customers’ experience in-store and online as we continue to execute against our long-term strategic initiatives. Chewy’s high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart’s store footprint and diverse offerings. Together, PetSmart and Chewy will provide the most convenient customer experience to a wider base of pet parents across every channel.”

Upon closing, Chewy will continue to be led by CEO Ryan Cohen and operate largely as an independent subsidiary of PetSmart, focusing on its current business strategy, while PetSmart will continue to execute its strategic initiatives across the combined company.

“Since we started Chewy, we have been dedicated to understanding and satisfying the evolving needs of our customers to deliver the highest quality pet products and customer service,” said Cohen.

“Combining our strong e-commerce expertise with PetSmart’s best-in-class infrastructure, footprint and breadth of offerings including services will help us ‘wow’ our customers even more.”

The acquisition, which is subject to customary regulatory approvals, is expected to close by the end of PetSmart’s second fiscal quarter of 2017.

PetSmart’s recent acquisition of Allpaws was more about social innovation than retail services, demonstrating the importance of both aspects to the pet supply retailer.

BUSINESS - Zoetis to Acquire Nexvet Biopharma

Zoetis Inc. and Nexvet Biopharma plc announced an agreement in which Zoetis, through a wholly owned subsidiary (“Zoetis Bidco”), will purchase Nexvet, an innovator in monoclonal antibody therapies for companion animals, for a purchase price of US$6.72 per share, representing an aggregate equity valuation of approximately US$85 million.

The acquisition will strengthen Zoetis’ pipeline of solutions for chronic pain management in dogs and cats, which represents an area of high-need in companion animal health.

The board of directors of Nexvet has unanimously approved the acquisition, which is being implemented by means of a scheme of arrangement, a statutory procedure under Irish law.

The acquisition is subject to approval by Nexvet’s shareholders and the Irish High Court and other customary conditions, and it is currently expected to be completed during the second half of 2017.

Nexvet is known for monoclonal antibody (mAb) therapies being developed for companion animals in pain and other therapeutic areas, and has research and development operations in Melbourne, Australia, a manufacturing facility in Tullamore, and a U.S. office in San Francisco.

“This acquisition is a strategic fit that brings to Zoetis an R&D organization that shares our commitment to industry-leading innovation,” said Dr. Alejandro Bernal, Executive Vice President and Group President, Strategy, Commercial and Business Development at Zoetis.

“It will strengthen our R&D pipeline in monoclonal antibodies and help sustain our category leadership in chronic pain management for companion animals, which is an area poised for innovation with new mAb therapies. The transaction demonstrates how we continue to invest to drive innovation and future growth.”

Zoetis has been a leader in the treatment of osteoarthritis pain and inflammation in dogs for two decades with the company’s Rimadyl® (carprofen), the first non-steroidal anti-inflammatory drug (NSAID) product approved for use in dogs.

Zoetis also developed and markets the NSAID product Trocoxil (mavacoxib), a COX-2 inhibitor approved in the European Union and other international markets to treat arthritis pain and inflammation in dogs.

Nexvet’s pipeline product ranevetmab, a mAb targeting nerve-growth factor (NGF) for treatment of chronic pain associated with osteoarthritis in dogs, would, upon approval, be the companion animal industry’s first monoclonal antibody therapy administered monthly by injection for chronic pain.

Ranevetmab would enable Zoetis to expand its portfolio of solutions for chronic pain in dogs.

Nexvet is also developing frunevetmab, a monoclonal antibody targeting NGF to treat chronic pain associated with osteoarthritis in cats.

Feline treatments for pain are limited, and frunevetmab could open up a new opportunity in feline pain that is underserved today.

“We are certain that Zoetis, with its leadership in R&D, high quality manufacturing, marketing excellence, global scale and strong customer relationships, is the ideal company to guide our monoclonal antibody candidates through development into commercialization,” said Dr. George Gunn, Chairman of the Board of Nexvet.

“We see the integration with Zoetis as the logical next step to realize our ambition to bring groundbreaking antibody therapeutics to market.”

BUSINESS - Leaders in Pet Sitting Services, Rover.com and DogVacay, Merge

(Courtesy Rover.com DogVacay)

Rover.com, the nation’s largest network of pet sitters and dog walkers, and DogVacay, a leading online and mobile pet-sitting community, are joining forces.

By combining resources, pet owners will have access to a network of more than 100,000 vetted and insured sitters, offering a range of services, in thousands of cities in every state across the U.S. and in Canada.

“Rover and DogVacay are both made up of dog people on a mission to enable everyone to experience the love and joy of a pet,” said Aaron Easterly, Rover’s CEO.

“Together, we can accomplish our goals quicker and make an even bigger impact. Plus, this partnership will enable us to pick up engineering velocity, bring new products to market faster and invest even more aggressively in building the best tools for our sitters and dog walkers.”

To date, millions of services have been booked through the companies, which generated over $150 million in bookings in 2016.

“Our goal has always been to make quality pet care accessible to everyone, and with Rover and DogVacay’s experience and expertise, we will continue to create the best solution for our host community, our pet parents and most importantly, our pets that we love as family,” said Aaron Hirschhorn, DogVacay’s CEO.

The combined companies expect to accelerate international expansion efforts.

Rover’s headquarters will continue to be in Seattle and led by Easterly as CEO, and Hirschhorn will join Rover’s Board of Directors.

YourSAY 2017.1 - What are the Concerns/Benefits of Veterinary Industry Corporatization?

There is a growing trend of animal healthcare delivery moving towards large corporations and away from the owner/managed independent clinician.

The purpose of the YourSAY™ 2017.1 is to discover what thought leaders in the urban animal industry believe are the positive and negative aspects of large corporations purchasing veterinary clinics.

InfoStream has published a variety of articles on vet clinic acquisitions:

Mars Petcare Acquires BluePearl Veterinary Hospitals 

VCA Antech Acquires Associate Veterinary Clinics 

VCA to be Acquired by Mars Inc.

And explored the pros and cons in:

Pros and Cons: Corporatization of the Veterinary Industry.

YourSAY™ Surveys collect opinions from thought leaders that will illuminate future discussions about companion animals, and you are invited to have your say in the latest survey.

This YourSAY™ Survey closes on Wednesday, 8 March 2017 at midnight Eastern Time. You may start and stop your participation to serve your convenience until you click the 'finished' button or until the survey closes. Click this link to proceed to the survey:

YourSAYTM 2017.1 Survey 

Your identity will be anonymous and any survey results will be shared in the aggregate. Summary results of this survey will be reported in InfoStream during the week of March 13th, 2017.

BUSINESS - Pros and Cons: Corporatization of the Veterinary Industry

(Banfield Pet Hospital)

The Mars acquisition of VCA has resulted in concern in some parts of the veterinary community.

There are vets who have felt disenfranchised and restricted by corporatization, and others who feel that corporatization compromises vet care.

Banfield pet hospitals, an earlier Mars acquisition, have faced significant criticism from vets whose practices were purchased and brought under their corporate management.

Banfield was purchased by Mars in 2007, and Mars further expanded into the pet healthcare industry in 2015 with the acquisition of BluePearl.

Although Banfield’s mixed reputation caused some pause for BluePearl executives when Mars approached them, Dr. Neil Shaw outlined some of the benefits of being acquired by Mars.

Some of the benefits that Shaw saw for BluePearl in the acquisition included:  

1. Ability to solicit input from successful professionals in other service industries on how to develop the very best models for service
2. Grow our internal team development/training capability
3. Provide additional advancement opportunities for all team members
4. Hopefully be able to increase our benefit package over time
5. Grow the organization by expanding the number of BluePearl hospitals to reach more pets
6. Increase the efficiency of the referral process for it to have a larger footprint within the veterinary community
   
   

These benefits are among the many reasons that corporatization, controversial though it may be, offers hope for an industry currently struggling with mental health crises and frequent burn-out, the high cost of turnover among veterinary teams, and a changing dynamic when it comes to practice management.

As Today’s Veterinary Practice noted last year, “today’s veterinary practice is no longer part of an insignificant, mom-and-pop industry; instead, it is an exciting, evolving marketplace to which the rest of the world is paying close attention.”

Increasing the support base for veterinarians has the potential to alleviate these pressures on individual veterinarians, and that would be good for everyone from the boardroom to the waiting room to the homes of well-cared-for clients.

The Mars acquisition of VCA is an interesting move, and structurally different than both the Banfield and BluePearl acquisitions.

Unlike both Banfield and BluePearl, which were companies founded by veterinarians, none of VCA’s founders are vets.

Despite this, VCA has gained a reputation that eluded Banfield and although views among the veterinary community are mixed, the company has a reputation for providing consistent quality care in its clinics and hospitals.

If Mars is able to incorporate VCA’s positive reputation and approach to pet healthcare, the merger has the potential to offer significant benefits to both vets and clients.

One of the ways corporatization could work as a positive force, and a focus that Mars will benefit from and hopefully avoid the mixed results seen by Banfield, is to centre veterinarian agency and autonomy – to offer support and infrastructure and business training to the veterinarians, without rigidly dictating how they do their jobs.

This was the main complaint from vets who disliked or distrusted corporatization, and, in the UK, where the agency of individual vets has been preserved within corporatization, the response is much more universally positive.

Simon Innes, the chief executive of CVS in the UK, told The Telegraph, “You don’t really need to dictate to clinicians. The minute you start to do that, is the minute they say no… The idea of the model is that at the business end we create an environment where vets can get on with what they are good at: treating clients. We help them by giving them professional support they need.”

What do you think about the corporatization of the veterinary industry?

Watch InfoStream this week for a YourSAYTM survey and share your views.

About Tiffany Sostar

Tiffany is a published academic, an editor with the Editors Association of Canada, an independent scholar and researcher, and a self-care and narrative coach. She is particularly interested in the intersection of technology and identity - how our tools shape our selves and change our stories, and in how the nature of work is changing as we incorporate more technology into our daily lives.

BUSINESS - Walmart Continues Bid to Become Ecommerce Heavyweight

Walmart has once again upped its game in the world of ecommerce.

Last year the retail giant took a major step to compete in the ecommerce market with the acquisition of Jet.com.

InfoStream predicted at the time the two companies had the potential to make a dent in sector-leading Amazon’s market share.

Their intention to do just that was illustrated by Walmart’s recent adoption of a free two-day shipping program.

To further bolster their ecommerce, Jet.com purchased ShoeBuy for approximately $70 million in January of this year.

Shoebuy is a leading online footwear, clothing and accessories retailer that carries over 800 brands and will continue to operate as a stand alone site.

That acquisition was followed by the purchase of outdoor retailer Moosejaw by Walmart just last week for $51 million.

While Moosejaw is a small retailer, they have experienced significant growth in contrast to other outdoor gear stores.

In case anyone had been in doubt, Walmart is showing they are serious about becoming a major ecommerce player.

Their strategy seems to be working for the company.

Walmart recently announced online sales gained 29% in the fourth quarter which ended January 31.

“We’re happy about how fast we’re moving, but still have a lot of work to do,” Marc Lore, President and CEO Walmart ecommerce US, said on a call with reporters.

Lore was up-front about the company’s interest in more acquisitions similar to Moosejaw.

It won’t be surprising to hear about additional ecommerce related purchases by Walmart in the near future.

ACQUIRE - Unilever Acquires Seventh Generation Inc.

Unilever announced last week they have completed the acquisition of Seventh Generation, Inc., a North American home and personal care products company.

Their intention to acquire the company was publicized in September, shortly after reports they were in talks to acquire The Honest Company.

Seventh Generation is a Vermont based business which makes natural and eco-conscious cleaning products.

The company’s turnover exceeded US $200m in 2015 and it has seen double digit compounded annual growth over the last 10 years.

Seventh Generation has a comprehensive product portfolio and a distribution network covering the ‘natural’ category in grocery, mass merchandise and e-commerce channels.

The biggest difference between The Honest Company, that also sells natural products, and Seventh Generation is the former largely sells directly to the consumer while Seventh Generation sells predominantly through retailers.

Nitin Paranjpe, President of Unilever’s Home Care business said in a release: “Seventh Generation has long been a disruptor in the US marketplace, leading the industry in sustainable innovation while attracting new generations of conscious consumers. This addition to Unilever’s product portfolio will help us meet rising demand for high-quality products with a purpose.”

As previously reported in InfoStream, the value of potentially acquiring The Honest Company goes beyond the product portfolio.

It indicates a concentrated effort by Unilever to access the subscription bases of successful start-ups in order to diversify their customer base and remain agile in a new market environment.

This focus was demonstrated earlier this year when Unilever purchased ECommerce startup Dollar Shave Club.

ACQUIRE - Unilever Negotiating Acquisition of The Honest Company

Unilever’s proposed purchase of Jessica Alba’s The Honest Company for $1 billion is its second recent move to acquire young start-ups with direct-to-consumer subscription models.

The Dollar Shave Club was purchased by Unilever earlier this year, allowing the much larger company to tap into the market share that Dollar Shave Club had opened up.

The model of cheap, subscription-based service eliminates a lot of expensive elements involved in brick-and-mortar operations.

These types of purchases offer benefits for the start-up in terms of an influx of cash to push them into the black.

For the larger company, such as Unilever with these purchases, or Walmart purchasing Jet.com, the benefits are less tangible but no less real.

Acquiring start-ups that are finding footholds with consumers who now demand much more flexibility and responsiveness from their providers allows large companies to remain relevant in a changing capitalist climate.

The convenience and price point are probably also a factor in The Honest Company’s success, with their bundle services and subscriptions designed to fit specific lifestyles.

The Honest Company also offers the promise of eco-friendly and baby-safe products (though there has been controversy over whether they keep that promise).

This second purchase by Unilever indicates a similar focus on accessing the subscription bases of successful start-ups in order to diversify their customer base and remain agile in a new market environment.

In 2014, 80% of The Honest Company’s sales were via a monthly subscription service. Although their products are now available in Costco, Whole Foods, and Target, their subscription services are still a significant part of their marketing.

And, even if some of their subscribers are inactive, those inactive subscribers are still a valuable commodity for Unilever.

Research has shown that even inactive subscribers purchase more, and more frequently, than non-subscribers. This means that Unilever gains benefits from The Honest Company’s subscription-model start despite the company’s move into department stores.

And the subscription model offers valuable information and direct access to customers, which provides value beyond the standard sales figures.

With venture capitalists being much choosier about where their money goes, these sorts of alliances between agile young start-ups and established larger companies will become more and more important.

By Tiffany Sostar

Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.