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Analyze whether PetSmart should acquire Banfield's stock

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As of May 1, 2011, Petsmart operated 1,192 retail stores and had full-service veterinary hospitals in 776 of our stores. MMI Holdings, Inc., through a wholly owned subsidiary, Medical Management International, Inc., collectively referred to as "Banfield," operated 766 of the veterinary hospitals under the registered trade name of "Banfield, The Pet Hospital." The remaining 10 hospitals are operated by other third parties in Canada. PetSmart currently owns 21.4% of Banfield's voting shares of common stock. The company's equity in income from investment in Banfield, was $10.4 million, $6.5 million and $2.6 million for 2010, 2009, and 2008, respectively. PetSmart also collected license fees, utilities and other cost reimbursements from Banfield of $34.2 million, $33.2 million, and $30.1 million during 2010, 2009, and 2008, respectively.

Based on Petsmart's current financial health, would it be benefit for the company to acquire Banfield Pet hospital , and integrate it to every stores ? Would this consider a leverage buyout ? What should be the purposed amount for the acquisition and why ? How do the company and its management, background, and unique financial characteristics fit with the objectives ?

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