It could stand for Mastiff, Weimaraner, and Irish Setter, but MWI Veterinary Supply is actually named after founder and veterinarian Millard Wallace Ickes. The veterinary products distributor supplies drugs, diagnostics, equipment, and other medical supplies for companion animals and livestock. It serves veterinary practices from about a dozen distribution centers across the US and in the UK. The firm offers 30,000 products from more than 500 vendors. In addition to medical supplies and equipment, MWI distributes pet food and nutritional products. The company, in business since 1976, offers customers online ordering, tools to manage inventory, consultation for equipment, and pet cremation services.
MWI publishes product catalogs and monthly magazines which are often used by customers as reference tools for ordering. While a robust sales force and roster of printed materials are vital to its marketing strategy, online ordering is becoming a significant sales channel, generating about 35% of MWI's product sales in 2010 (up from about 30% in 2009).
MWI has hundreds of sales and marketing representatives serving its clients. Its largest customers are Medical Management International (known as Banfield, the nation's largest private veterinary practice with about 750 vet hospitals), and Feeders' Advantage, a buying group formed by feedlot operators.
About 95% of MWI's product sales are from the sale of pharmaceuticals and supplies to veterinary practices (the rest from commissions and sales to parties other than veterinary practices). Pharmaceuticals account for 40% of its revenue and typically include anesthetics, analgesics, antibiotics, opthalmics, and hormones. Vaccines are MWI's second biggest earner, bringing in about 20% of its income, and are mostly composed of small animal, equine, and production animal biologicals. Its parasiticides (roughly 10% of annual sales ) are used to get rid of fleas, ticks, flies, mosquitoes, and internal parasites.
MWI's other products range from capital equipment such as surgical monitors, dental machines, and x-ray machines to veterinary pet food and nutritional products that include premium pet foods, dietary supplements, vitamins, and specialty treats.
The company does not manufacture the vast majority of its products, instead it relies on suppliers that include Pfizer, Boehringer Ingelheim, Merial, and Fort Dodge Animal Health. Products from its ten largest vendors account for about 70% of its sales. Pfizer is MWI's single biggest supplier, providing products that account for about one quarter of MWI's sales.
MWI grows, in part, by acquiring regional suppliers. Since the market for animal health products distribution is highly fragmented, there are plenty of national, regional, and local distributors that make attractive candidates for MWI to purchase and absorb into its own operations. For instance, in 2011 it acquired distributor Micro Beef Technologies, a distributor of production animal health products, for some $60 million. The purchase helped to expand MWI'S distribution network and management systems products.
Though the company makes the majority of its sales in the US, it is also looking to make acquisitions outside the country to increase its global footprint. It made one such acquisition in 2010 when it purchased Centaur Services, a UK-based supplier of animal health products.
In addition, MWI has widened its geographic presence by expanding or constructing new distribution centers; it operates about a dozen facilities in the US and one in the UK. Areas targeted for growth include the Northeastern, Midwestern, and Southeastern regions of the US.
The company also captures new customers by offering improved technology systems (its e-commerce platform, for example) and by increasing the numbers of sales and customer service representatives available to its potential and existing clients. Acquisitions also enhance the firm's technology offerings: Its purchase of Micro Beef Technologies adds computerized management systems for the production animal market.
MWI became an independent company in 2002 when venture capital firm Bruckmann, Rosser, Sherrill & Co. bought the firm from Agri Beef Co. Bruckmann, Rosser, Sherrill & Co. gradually sold off its shares in MWI, while Agri Beef retains a small minority (about 4%) stake of the publicly traded company. The majority shareholder in MWI is investment manager Neuberger Berman with about 12%. CEO James Cleary also serves on the board of directors and holds about 2% of MWI's shares. – less