Heska reports loss as acquisition looms

LOVELAND — Heska Corp. (Nasdaq: HSKA) posted growing losses and slipping sales in the first quarter of 2023 as the veterinary products supplier gears up for a $1.3 billion acquisition by candy and pet food giant Mars Inc. that’s expected to close this year.

The company posted $9.8 million in sales in the most recent period, down 1.8% year over year, on $62.4 million in sales, down 3.7% from the first quarter of 2022.

Citing the upcoming Mars deal, Heska did not provide commentary in its quarterly report when it was released last week, nor did company executives host an earnings call. 

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Heska has been tight lipped about the acquisition, which is subject to customary regulatory review, and is expected to close in the second half of the year.

An internal Heska employee communication, disclosed last month to the U.S. Securities and Exchange Commission, indicates that the firm hopes to minimize disruption during the transition.

“Nothing will change in the near-term,” the memo to employees said. “Until the acquisition is complete, each company has a legal obligation to, and will continue to operate independently.”

Once the deal is complete, “it is our desire and intention that all Heska employees will join Mars Petcare’s Science and Diagnostics business,” Heska told its workers. “… Heska’s history of keeping, expanding, and investing in people and teams after mergers and acquisitions is strong, friendly, and always people-centered.”

Under the terms of acquisition, Mars will pay $120 per Heska share, a premium of nearly 40% over the Loveland firm’s average trading price over the past two months.

“Upon transaction close, Heska will join Mars Petcare, a purpose-driven global business serving pets and pet owners through products and services within veterinary health and diagnostics, nutrition, innovation and technology,” the companies said in a statement Monday. “This acquisition will enable the science and diagnostics division of Mars Petcare to expand its diagnostic offerings and broadly promote point-of-care veterinary diagnostics to the global pet health care community.”

Heska has been increasingly active in the diagnostics space since the early 2023 acquisition of Boulder-based MBio Diagnostics Inc., which does business as LightDeck Diagnostics.

Heska was founded in Fort Collins in 1988 as Paravax Inc., which specialized in the development of animal vaccines. The company went public in 1997.