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MWI VETERINARY SUPPLY, S-1/A Filing

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MWI VETERINARY SUPPLY,  S-1/A Filing Powered By Docstoc
					                                      As filed with the Securities and Exchange Commission on July 18, 2006.
                                                                                                                                   Registration No. 333-134039

                                             UNITED STATES
                                 SECURITIES AND EXCHANGE COMMISSION
                                                                       Washington, D.C. 20549



                                                              Amendment No. 2 to
                                                                 FORM S-1
                                                             REGISTRATION STATEMENT
                                                                      UNDER
                                                             THE SECURITIES ACT OF 1933


                                             MWI VETERINARY SUPPLY, INC.
                                                        (Exact name of registrant as specified in its charter)
                              DELAWARE                                         5047                                        02-0620757
                      (State or Other Jurisdiction of             (Primary Standard Industrial                          (I.R.S. Employer
                     Incorporation or Organization)               Classification Code Number)                          Identification No.)

                                                          651 S. STRATFORD DRIVE, SUITE 100
                                                                 MERIDIAN, IDAHO 83642
                                                                      (800) 824-3703
                      (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


                                                                  JAMES F. CLEARY, JR.
                                                   PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                                         651 S. STRATFORD DRIVE, SUITE 100
                                                                MERIDIAN, IDAHO 83642
                                                                        (800) 824-3703
                              (Name, address including zip code, and telephone number, including area code, of agent for service)


                                                                             Copies to:
                                 JAMES A. LEBOVITZ, ESQ.
                               STEPHEN M. LEITZELL, ESQ.
                                     DECHERT LLP                                                    ROBERT EVANS, ESQ.
                                     CIRA CENTRE                                                SHEARMAN & STERLING LLP
                                   2929 ARCH STREET                                               599 LEXINGTON AVENUE
                           PHILADELPHIA, PENNSYLVANIA 19104                                     NEW YORK, NEW YORK 10022
                                      (215) 994-4000                                                    (212) 848-4000



                                                      Approximate date of proposed sale to the public:
                                           As soon as practicable after the effective date of this registration statement.


If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box: 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. 
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. 
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant
shall have filed a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant
to Section 8(a), may determine.
                                                          Subject to Completion, Dated July 6, 2006

The information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange Commission
declares our registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.

2,987,379 Shares




    MWI VETERINARY SUPPLY, INC.

Common Stock
$   per share

       MWI Veterinary Supply, Inc. is offering 869,565 shares of                             The last reported sale price of our common stock on July 5,
       common stock and the selling stockholders are offering                                  2006 was $35.40 per share.
       2,117,814 shares of common stock. We will not receive any of
       the proceeds from the shares of common stock sold by the
       selling stockholders.
                                                                                              Trading Symbol: Nasdaq national market — MWIV



This investment involves a high degree of risk. See “Risk Factors” beginning on page 8 of this prospectus.

                                                                                                                            Per Share                    Total
Public offering price
Underwriting discount
Proceeds, before expenses, to MWI
Proceeds, before expenses, to selling stockholders


Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful and complete. Any representation to the contrary is a criminal offense.
We have granted the underwriters the right to purchase on a pro rata basis up to 130,435 additional shares of our common stock from us and
up to 317,671 shares of common stock from the selling stockholders to cover any over-allotments. The underwriters can exercise this right at
any time within 30 days after the offering. The underwriters expect to deliver the shares of common stock to investors on or about      ,
2006.

                                                                  Joint Book Running Managers


Piper Jaffray
                                                      Banc of America Securities LLC
                                                                                   William Blair & Company

                                                          The date of this prospectus is               , 2006
                                                        TABLE OF CONTENTS

                                                                                                              Page
                      Summary                                                                                    1
                      Risk Factors                                                                               8
                      Special Note Regarding Forward-Looking Statements                                         20
                      Use of Proceeds                                                                           21
                      Dividend Policy                                                                           21
                      Price Range of Common Stock                                                               21
                      Capitalization                                                                            23
                      Selected Financial Data                                                                   24
                      Management’s Discussion and Analysis of Financial Condition and Results of
                        Operations                                                                               27
                      Business                                                                                   44
                      Management                                                                                 56
                      Certain Relationships and Related Party Transactions                                       65
                      Principal and Selling Stockholders                                                         67
                      Description of Capital Stock                                                               69
                      Underwriting                                                                               72
                      Legal Matters                                                                              76
                      Experts                                                                                    76
                      Where You Can Find More Information                                                        76
                      Index to Financial Statements and Financial Statement Schedule                            F-1



You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different
information. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should
assume that the information contained in this prospectus is accurate as of the date on the front of this prospectus only. Our business,
financial condition, results of operations and prospects may have changed since that date. Information contained in our website does
not constitute part of this prospectus.

Unless otherwise stated, all references to “MWI,” “we,” “us,” “our,” the “Company” and similar designations refer to MWI
Veterinary Supply, Inc. “MWI,” our logo and other trademarks mentioned in this prospectus are the property of MWI or our
subsidiaries.
                                                                  SUMMARY

The items in the following summary are described in more detail later in this prospectus. This summary does not contain all the information
you should consider before investing in our common stock. You should carefully read the more detailed information set out in this prospectus,
especially the risks of investing in our common stock that we discuss under the “Risk Factors” section, as well as the financial statements and
the related notes to those statements included elsewhere in this prospectus. References in this prospectus to “we,” “us,” “our” and “MWI”
refer to MWI Veterinary Supply, Inc. unless the context requires otherwise. Unless otherwise indicated, all statistical information provided
about our business in this prospectus speaks as of March 31, 2006.

                                                                 Our Business

We are a leading distributor of animal health products to veterinarians across the United States. We distribute more than 10,000 products
sourced from over 400 vendors to more than 15,000 veterinary practices nationwide from ten strategically located distribution centers. Products
we sell include pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, supplies, veterinary pet food and nutritional products.
We market these products to veterinarians in both the companion animal and production animal markets. As of March 31, 2006, we had a sales
force of 237 people covering the United States. We also offer our customers a variety of value-added services, including on-line ordering,
pharmacy fulfillment, inventory management, equipment procurement consultation and special order fulfillment, which we believe closely
integrates us with our customers’ day-to-day operations and provides them with meaningful incentives to continue ordering from us.

Historically, approximately two-thirds of our total revenues have been generated from sales of companion animal products and one-third from
production animal products. For our fiscal year ended September 30, 2005, our total revenues were $496.7 million and our operating income
was $15.8 million. For the six-months ended March 31, 2006, our total revenues were $281.2 million and our operating income was
$12.1 million.

                                                                 Our Industry

According to the Animal Health Institute, an industry group representing manufacturers of animal health products, animal health product sales
in the United States for 2004 totaled $5 billion, an increase of 5% compared to 2003. The market for animal health products in the United
States is split between products sold for companion and production animals. Companion animals include dogs, cats, other pets and horses,
while production animals include cattle and other food-producing animals. The Animal Health Institute estimates that the market for animal
health products in the United States for 2004 was approximately 58% companion animal and 42% production animal.

Veterinarians are one of the primary purchasers of animal health products, particularly in the companion animal market. As of December 31,
2005, according to the American Veterinary Medical Association, or AVMA, there were more than 54,000 veterinarians in private practice in
more than 27,000 veterinary practices nationwide. Based on data provided by the AVMA, we estimate that these veterinary practices purchase
an average of $140,000 of animal health products annually, including food, the majority of which is ordered through distributors. We believe
that veterinary practices typically place at least one order per week to avoid storing and managing large volumes of supplies. We believe that
distributors play a vital role for veterinary practices by providing access to a broad selection of products through a single channel and helping
them efficiently manage their inventory levels. Distributors also offer product vendors substantial value by providing cost-effective access to a
highly fragmented and geographically diverse customer base.


                                                                           1
                                                               Our Strengths

We believe that our strengths include:

                Leading Distributor to Veterinarians. Based upon our total revenues for our fiscal year ended September 30, 2005, we are a
             leading animal health products distributor to veterinarians in the United States. While most of our products are available from
             several sources and our customers typically have relationships with several distributors, we believe that our broad product
             offering, competitive pricing, superior customer service, rapid product fulfillment and value-added services provide meaningful
             incentives for our customers to continue ordering from us.

                Leading Sales and Marketing Franchise. Our 237 sales representatives educate customers on new veterinary products, assist
             in product selection and purchasing, and offer inventory management solutions. We also publish detailed product catalogs and
             monthly magazines, which are often utilized by our customers as reference tools. While salespeople and printed materials are vital
             to our marketing strategy, we also provide on-line ordering, valuable business information and value-added services through our
             Internet site, www.mwivet.com.

                 Strong, Established Relationships with Veterinarians and Vendors. Our ability to serve as a single source for most of our
             customers’ animal health product needs has enabled us to develop strong and long-term customer relationships. For more than ten
             years we have maintained distribution arrangements with Banfield — The Pet Hospital, the nation’s largest private veterinary
             practice, and with our non-controlled affiliate, Feeders’ Advantage, L.L.C., a buying group composed of several of the largest
             cattle feeders in the United States. Since we do not manufacture any of our products, we are dependent on our vendors for our
             supply of products. While our vendors often have relationships with multiple distributors, many of our key vendors have been
             working with us for over ten years, while other key vendors have more recently expanded their relationships with us. We believe
             our market position makes us an attractive partner for leading product vendors, since we provide cost-effective access to a
             significant portion of the highly fragmented and geographically diverse veterinary market.

                Recurring Revenue Product Base. Over 95% of our product sales for our fiscal years ended September 30, 2005, 2004 and
             2003 were from consumable medicines and supplies commonly required by veterinarians in their practice. Historically, this aspect
             of our business has resulted in a recurring stream of revenues.

                Sophisticated Technology and Information Systems. In 2004, we successfully completed a comprehensive upgrade of our
             enterprise information system, the central hub for all of our business processes. This system supports order processing, inventory
             control, invoicing, shipping, sales analysis and reporting, supply chain management and financial accounting. We believe that this
             system could support more than a doubling of our revenues with minimal incremental investment.

                Experienced Management Team. We have a strong and experienced senior management team with substantial animal health
             industry expertise. The members of our senior management team have been with us for an average of over ten years, and each
             member has demonstrated a commitment and capability to deliver growth in revenues and profitability.


                                                                         2
                                                                  Our Strategy

Our mission is to strengthen our position as a leading national animal health products distributor while continuing to deliver substantial value to
our customers, increase our revenues and improve our profitability. Our strategy to achieve our mission is outlined below.

                Increase Sales to Our Existing Customers. We intend to increase our share of animal health product purchases from our
             existing customers by utilizing our proprietary customer database to focus our marketing efforts, expanding our sales force,
             selectively adding products to our portfolio and increasing and expanding the value-added services we provide to our customers.
             Competition for hiring sales representatives who have existing customer relationships is intense and we focus on retaining our
             valued staff who have demonstrated the skills needed to successfully market our products and services. If we fail to hire or retain
             a sufficient number of qualified professionals, it could adversely impact our business.

                Expand Our Business Assistance Services for Veterinarians. We intend to enhance our customer relationships by expanding
             our business assistance services for veterinarians. These value-added services include among others our e-commerce platform,
             Sweep™ in-clinic inventory management system and pharmacy fulfillment program. We recently began the process of upgrading
             our Internet site, www.mwivet.com, in order to enhance the e-commerce functionality available to our customers.

                Increase the Total Number of Customers We Serve. We intend to raise the percentage of veterinary practices we serve by
             increasing the number and productivity of our sales representatives, selectively acquiring competitors and adding distribution
             centers as we deem necessary. We see the greatest opportunities to add new customers in the Northeastern, Midwestern and
             Southeastern regions of the United States, areas where we do not hold the leading market position. We believe it is important to
             increase the total number of customers we serve in order to attain the growth goals that are a feature of many of our vendors’
             rebate programs. Changes to any vendor rebate program or our failure to achieve these growth goals may have a material effect
             on our gross profit and our operating results in any given quarter or year.

                Continuously Seek to Improve Operations. We continuously evaluate opportunities to increase sales, lower costs and realize
             operating efficiencies. Current initiatives include investments in our databases and warehouse management systems to further
             increase automation. We also plan to pursue alternative product sourcing strategies and have recently implemented a private label
             program on selected products to reduce our procurement costs and increase our profitability, while maintaining our strong
             relationships with key vendors.

                Make Selective Acquisitions. The U.S. market for animal health products distribution is highly fragmented, with numerous
             national, regional and local distributors. Many of these companies are small, privately-held businesses, some of which may
             represent attractive acquisition candidates. Since November 2004, we acquired and integrated Memorial Pet Care, Inc. and Vetpo
             Distributors, Inc. into our operations. On May 8, 2006, we acquired substantially all of the assets of Northland Veterinary
             Supply, Inc. (“Northland”) and we are in the process of integrating their business. We will continue to evaluate selective
             acquisitions that can benefit from our infrastructure, systems and expertise. However, difficulties with the integration of any
             acquisition may impose substantial costs and delays and cause other unanticipated problems for us.


                                                                           3
                                                            Recent Developments

On May 8, 2006, we acquired substantially all of the assets of Northland for approximately $4.0 million, consisting of $3.0 million in cash and
28,744 shares of unregistered restricted common stock. The acquisition agreement also calls for an adjustment to be paid in cash if Northland’s
working capital is greater than or less than a pre-determined level. Northland is based in Clear Lake, Wisconsin and is a distributor of animal
health products to approximately 500 veterinary practices and producers across the Midwestern United States.

                                                                 Our History

Our business commenced operations as part of a veterinary practice in 1976 and was incorporated as MWI Drug Supply, Inc., an Idaho
corporation, in 1980. MWI Drug Supply, Inc. was acquired by Agri Beef Co. in 1981. MWI Veterinary Supply Co. was incorporated as an
independent subsidiary of Agri Beef Co. in September 1994. Effective June 18, 2002, MWI Holdings, Inc. was formed by Bruckmann, Rosser,
Sherrill & Co. II, L.P. (“BRS”) for the sole purpose of acquiring all of the outstanding stock of MWI Veterinary Supply Co. from Agri Beef
Co. As a result of this transaction, MWI Veterinary Supply Co. became our wholly-owned subsidiary. On April 21, 2005, we changed our
name from MWI Holdings, Inc. to MWI Veterinary Supply, Inc.

                                                         Our Initial Public Offering

On August 3, 2005, we completed our initial public offering in which we sold an aggregate of 4,983,334 shares (including the exercise of the
underwriters’ over-allotment option) of our common stock at a price of $17 per share. We received net proceeds of $77,158,625 after deducting
the underwriting discounts and offering expenses. We used the net proceeds to redeem all of our Series A preferred stock for approximately
$39,788,763 and to repay approximately $37,369,862 of borrowings outstanding on our revolving credit facility under our amended credit
agreement.

                                                           Corporate Information

We are organized as a Delaware corporation. Our headquarters are located at 651 S. Stratford Drive, Suite 100, Meridian, Idaho 83642. Our
telephone number is (800) 824-3703. Our website address is www.mwivet.com. The information on our website is not incorporated as a part of
this prospectus.


                                                                          4
                                                                 The Offering

              Common stock offered by MWI Veterinary Supply, Inc.             869,565 shares
              Common stock offered by the selling stockholders                 2,117,814 shares
              Common stock to be outstanding after this offering               11,462,358 shares
              Use of proceeds                                                  We will not receive any proceeds from the sale of
                                                                               shares by the selling stockholders. We estimate that
                                                                               we will receive net proceeds from the sale of shares
                                                                               of our common stock in this offering of
                                                                               $28.5 million, or $32.9 million if the underwriters
                                                                               exercise their over-allotment option in full, after
                                                                               deducting underwriting discounts and commissions
                                                                               and estimated fees and expenses payable by us. We
                                                                               intend to use the net proceeds of this offering to
                                                                               repay borrowings outstanding on the revolving
                                                                               credit facility under our amended credit agreement
                                                                               and the remainder, if any, for general corporate
                                                                               purposes.
                                                                               You should read the discussion in the “Use of
                                                                               Proceeds” section of this prospectus for more
                                                                               information.
              Nasdaq National Market symbol                                    MWIV
              Risk factors                                                     See “Risk Factors” and the other information
                                                                               included in this prospectus for a discussion of
                                                                               factors you should carefully consider before
                                                                               investing in shares of our common stock.


The number of shares of our common stock to be outstanding after this offering is based on 10,592,793 shares outstanding as of March 31,
2006 and excludes 559,048 shares of common stock issuable upon exercise of outstanding options as of March 31, 2006 at a weighted average
exercise price of $3.84 per share. See “Management — Stock Incentive Plans.”

Unless we specifically state otherwise, the information in this prospectus does not take into account the sale of up to 440,106 shares of common
stock that the underwriters have the option to purchase from us and the selling stockholders on a pro rata basis to cover any over-allotments and
the 28,744 shares of restricted common stock we issued on May 8, 2006 in connection with the Northland acquisition. All information in this
prospectus assumes the issuance and sale of our common stock in this offering at an offering price of $35.40 per share, the last reported sales
price for our common stock on July 5, 2006 as reported by the Nasdaq National Market.


                                                                          5
                                           Summary Consolidated Financial and Operating Data

The summary consolidated financial and operating data below are derived from the following sources:

                Our consolidated financial statements for our fiscal years ended September 30, 2003, 2004 and 2005, which have been
             audited by an independent registered public accounting firm.

                Our unaudited interim condensed consolidated financial statements as of March 31, 2006 and for the six-months ended
             March 31, 2005 and 2006, which in the opinion of management reflect all adjustments necessary, to present fairly, in accordance
             with generally accepted accounting principles in the United States, the information for such periods and have been reviewed by an
             independent registered public accounting firm. The operating results of the interim periods are not necessarily indicative of results
             for a full year.

                Our unaudited as adjusted balance sheet data as of March 31, 2006 is as adjusted for this offering and the expected use of
             proceeds as if these events had been completed on March 31, 2006.

The summary consolidated financial and operating data below represent portions of our financial statements and are not complete. You should
read this information together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our
consolidated financial statements and the related notes to those statements included in this prospectus. Historical results are not necessarily
indicative of future performance.

                                                                                                        Six-Months Ended
                                                                 Year Ended September 30,                   March 31,
                                                               2003          2004          2005         2005         2006
                                                                       (in thousands, except per share amounts)
         Revenues:
           Product sales                                   $ 315,738      $ 367,863       $ 463,272      $ 210,148       $ 260,303
           Product sales to related party                     22,960         22,163          28,473         12,947          17,356
           Commissions                                         3,011          4,256           4,910          2,309           3,506
              Total revenues                                 341,709        394,282         496,655        225,404         281,165
         Cost of product sales                               294,692        338,684         426,709        192,308         238,485
         Gross profit                                         47,017         55,598          69,946         33,096          42,680
         Selling, general and administrative
           expenses (1)                                         35,886         41,872         52,647          23,819         29,712
         Depreciation and amortization                             976          1,146          1,528             727            915
         Operating income                                       10,155         12,580         15,771           8,550         12,053
         Other income (expense):
           Interest expense (2)                                 (3,034 )       (6,098 )        (6,515 )       (3,545 )       (1,133 )
           Earnings of equity method investees                     106            104             131             59             82
           Other                                                   218            218             268            124            227
              Total other expense                               (2,710 )       (5,776 )        (6,116 )       (3,362 )         (824 )
         Income before taxes                                     7,445          6,804           9,655          5,188         11,229
         Income tax expense                                     (3,116 )       (4,280 )        (5,098 )       (2,937 )       (4,435 )
         Net income                                              4,329          2,524           4,557          2,251          6,794
         Redeemable preferred stock accretion                   (2,714 )           —               —              —              —
         Income to common stockholders                     $     1,615 $        2,524 $         4,557 $        2,251 $        6,794
footnotes on the following page


                                                                           6
                                                                                                                    Six-Months Ended
                                                                            Year Ended September 30,                    March 31,
                                                                         2003          2004          2005           2005          2006
                                                                                  (in thousands, except per share amounts)
      Earnings per common share:
        Basic                                                        $       0.32     $           0.50     $         0.76      $         0.44      $          0.64
        Dilutive                                                     $       0.28     $           0.43     $         0.68      $         0.38      $          0.62
      Weighted average common shares
        outstanding:
        Basic                                                              5,013                 5,038             5,970               5,062              10,582
        Dilutive                                                           5,745                 5,878             6,697               5,880              10,873


                                                                                                                                 As of
                                                                                                                           March 31, 2006
                                                                                                                        Actual        As Adjusted
                                                                                                                             in thousands
         Cash                                                                                                         $         34     $    3,928
         Working capital (3)                                                                                               54,156          82,704
         Total assets                                                                                                     189,080         192,974
         Total debt                                                                                                        25,043             389
         Total stockholders’ equity                                                                                        93,813         122,361


                                                                                                                                          Six-Months
                                                                                                    Year Ended                               Ended
                                                                                                   September 30,                           March 31,
                                                                                              2003      2004            2005            2005       2006
        Other Data:
          Product sales from Internet as a percentage of sales                                18 %        18 %            21 %           21 %            23 %
          Field sales representatives (at end of period)                                      94         111             134            135             142
          Telesales representatives (at end of period)                                        75          79              93             90              95
          Fill rate (4)                                                                       98 %        98 %            98 %           98 %            98 %

(1)            Includes management fees expense of $250, $386 and $2,456 for our fiscal years ended September 30, 2003, 2004 and 2005, respectively, and $266 and $0 for
       the six-months ended March 31, 2005 and 2006, respectively as a result of payments to BRS and Agri Beef Co. The management and consulting services agreement
       was terminated in August 2005 for a termination fee of $2,000 that is included in the management fee expense of $2,456 for fiscal year ended September 30, 2005.

(2)             Includes accretion of our Series A preferred stock dividends beginning on July 1, 2003, which is nondeductible for income tax purposes. Accretion expense
       included as a component of interest expense was $999, $4,239 and $4,055 for fiscal years ended September 30, 2003, 2004 and 2005, respectively and $2,315 and $0
       for the six-months ended March 31, 2005 and 2006, respectively. We used a portion of the proceeds from our initial public offering in August 2005 to redeem all the
       Series A preferred stock.

(3)           Defined as current assets minus current liabilities.

(4)            Defined as, for any period, the dollar value of orders shipped the same day they were placed from any warehouse expressed as a percentage of the total dollar
       value of the orders placed by customers in the period.



                                                                                          7
                                                               RISK FACTORS

The value of your investment will be subject to the significant risks inherent in our business. Before you invest in our common stock, you should
be aware that there are various risks, including those described below. You should carefully consider these risk factors, which we believe are
all the risks to our business that are material, together with all of the other information included in this prospectus. If any of the events
described below occur, our business and financial results could be adversely affected in a material way, and you therefore may lose all or part
of your investment. Additional risks and uncertainties not presently known to us or that are currently deemed immaterial may also impair our
business operations.

                                                        Risks Related To Our Business

Our operating results may fluctuate due to factors outside of management’s control.

Our future revenues and results of operations may significantly fluctuate due to a combination of factors, many of which are outside of
management’s control. The most notable of these factors include:

                vendor rebates based upon attaining certain growth goals;

                changes in or availability of vendor rebate programs;

                changes in the way vendors introduce products to market;

                the recall of a significant product by one of our vendors;

                extended shortage or backorder of a significant product by one of our vendors;

                seasonality;

                the impact of general economic trends on our business;

                the timing and effectiveness of marketing programs offered by our vendors;

                the timing of the introduction of new products and services by our vendors; and

                competition.

These factors could adversely impact our results of operations and financial condition. We may be unable to reduce operating expenses quickly
enough to offset any unexpected shortfall in revenues or gross profit. If we have a shortfall in revenues or gross profit without a corresponding
reduction to expenses, operating results may suffer. Our operating results for any particular fiscal year or quarter may not be indicative of
future operating results. You should not rely on year-to-year or quarter-to-quarter comparisons of results of operations as an indication of our
future performance.

An adverse change in vendor rebates could negatively affect our business.

The terms on which we purchase or sell products from many vendors of animal health products entitle us to receive a rebate based on the
attainment of certain growth goals. Vendors may adversely change the terms of some or all of these rebate programs. Because the amount of
rebates we earn is directly related to the attainment of pre-determined sales growth goals, and because the nature of the rebate programs and the
amount of rebates available are determined by the vendors, there can be no assurance as to the


                                                                              8
amount of rebates that we will earn in any given year. Historically, we have been successful in achieving most rebate growth goals and have
not experienced any material adverse impact on our results of operations and financial condition due to a change in a rebate program. Changes
to any rebate program initiated by our vendors may have a material effect on our gross profit and our operating results in any given quarter or
year. Vendors may reduce the amount of rebates offered under their programs, or increase the growth goals or other conditions we must meet to
earn rebates to levels that we cannot achieve. During calendar year 2006, certain of our vendors modified their rebate programs with us. These
rebate program modifications changed the revenue growth targets from annual-weighted calendar year targets to either quarterly or trimester
growth targets. These modifications will result in rebates previously expected to be earned and recognized in our first fiscal quarter 2007
ending on December 31 (or the fourth calendar quarter) to be recognized earlier in our fiscal year 2006.

Additionally, factors outside of our control, such as customer preferences or vendor supply issues, can have a material impact on our ability to
achieve the growth goals established by our vendors, which may reduce the amount of rebates we receive. The occurrence of any of these
events could have an adverse impact on our results of operations.

Our quarterly operating results may fluctuate significantly, and these fluctuations may cause our stock price to fall.

Our quarterly revenues and operating results have varied significantly in the past, and may continue to do so in the future. While we accrue
rebates from vendors as they are earned, our rebates have historically been highest during the quarter ended December 31, since most of our
vendors’ rebate programs were designed to include targets to be achieved during the calendar year. During calendar year 2006, certain of our
vendors modified their rebate programs with us. These rebate program modifications changed the revenue growth targets from annual-weighted
calendar year targets to either quarterly or trimester growth targets. These modifications will result in rebates previously expected to be earned
and recognized in our first fiscal quarter 2007 ending on December 31 (or the fourth calendar quarter) to be recognized earlier in our fiscal year
2006. Historically, our revenues have been seasonal, with peak sales in the spring and fall months. The seasonal nature of our business is
directly tied to the buying patterns of veterinarians for production animal health products used for certain medical procedures performed on
production animals during the spring and fall months. These buying patterns can also be affected by vendors’ and distributors’ marketing
programs launched during the summer months, particularly in June, which can cause veterinarians to purchase production animal health
products earlier than those products are used. This kind of early purchasing may reduce our sales in the months these purchases would have
otherwise been made. While companion animal products tend to have a different product use cycle than production animal health products, and
approximately two-thirds of our revenues have been generated from the sale of companion animal products, we cannot assure you that our
revenues and operating results will not continue to fluctuate on a quarter-to-quarter basis. We believe period-to-period comparisons of our
results of operations are not necessarily meaningful as our future revenue and results of operations may vary substantially. It is also possible
that in future quarters our results of operations will be below the expectations of securities analysts and investors. In either case, the price of our
common stock could decline, possibly materially.


                                                                              9
Our market is highly competitive. Failure to compete successfully could have a material adverse effect on our business, financial
condition and results of operations.

The market for veterinary distribution services is highly competitive, continually evolving and subject to technological change. We compete
with numerous vendors and distributors based on customer relationships, service and delivery, product selection, price and e-business
capabilities including:

                Butler Animal Health Supply;

              Henry Schein, Inc.;

                Lextron Animal Health, Inc.;

                Professional Veterinary Products, Ltd.;

                Vet Pharm, Inc.;

                Walco International, Inc.;

                Webster Veterinary Supply, a division of Patterson Companies, Inc.; and

                other national, regional, local and specialty distributors.

Some of our competitors may have more customers, stronger brand recognition or greater financial and other resources than we do. Most of our
products are available from several sources, including other distributors and vendors, and our customers typically have relationships with
several distributors and vendors. Many of our competitors have comparable product lines, technical expertise or distribution strategies that
directly compete with us. Our competitors could obtain exclusive rights to distribute certain products, eliminating our ability to distribute those
products. The entry of new distributors in the industry could also have a material adverse effect on our ability to compete. Additionally, some
of our vendors may decide to compete with us by selling their products directly to our customers. If we do not compete successfully against
these organizations, it could have a material and adverse effect on our business, financial condition and results of operations.

Consolidation in the veterinary distribution business and veterinary practices may decrease our revenues and profitability.

Consolidation in the veterinary distribution business could result in existing competitors increasing their market share, which could give them
greater pricing power, decrease our revenues and profitability, and increase the competition for customers. Consolidation of the many small,
privately-held veterinary practices would result in an increasing number of larger veterinary practices, which could have increased purchasing
leverage and the ability to negotiate lower product costs. This could reduce our operating margins and negatively impact our revenues and
profitability. Any of these developments could result in increased marketing expenses and have a material adverse effect on our business,
financial condition and results of operations.

Our business, financial condition and results of operations depend upon maintaining our relationships with vendors.

At March 31, 2006 we distributed more than 10,000 products sourced from more than 400 vendors to over 15,000 veterinary practices. We
currently do not manufacture any of our products and are


                                                                               10
dependent on these vendors for our supply of products. Our top three vendors, Fort Dodge, Pfizer and Vedco, supplied products that accounted
for approximately 45% of our revenues for our fiscal year ended September 30, 2005 and 47% for the six-months ended March 31, 2006. Our
ten largest vendors supplied products that accounted for approximately 73% of our revenues for our fiscal year ended September 30, 2005 and
72% for the six-months ended March 31, 2006.

Our ability to sustain our gross profits has been, and will continue to be, dependent in part upon our ability to obtain favorable terms and access
to new and existing products from our vendors. These terms may be subject to changes from time to time by vendors, such as changing from a
“buy/sell” to an agency relationship, or from an agency to a “buy/sell” relationship. In a “buy/sell” transaction, we purchase or take inventory
of products from our vendors. Under an agency relationship, when we receive orders for products from a customer, we transmit the order to the
vendor who then picks, packs and ships the products. Any changes from “buy/sell” to agency or from agency to “buy/sell” could adversely
affect our revenues and operating income. The loss of one or more of our large vendors, a material reduction in their supply of products to us or
material changes in the terms we obtain from them could have a material adverse effect on our business, financial condition and results of
operations.

Some of our current and future vendors may decide to compete with us in the future by pursuing or increasing their efforts in direct marketing
and sales of their products. These vendors could sell their products at lower prices and maintain a higher gross margin on their product sales
than we can. In this event, veterinarians or animal owners may elect to purchase animal health products directly from these vendors. Increased
competition from any vendor of animal health products could significantly reduce our market share and adversely impact our financial results.

In addition, we may not be able to establish relationships with key vendors in the animal health industry if we have established relationships
with competitors of these key vendors. We have written agreements with approximately 30 of our vendors, including Fort Dodge and Pfizer.
Some of our agreements with vendors are for one-year periods. Upon expiration, we may not be able to renew our existing agreements on
favorable terms, or at all. If we lose the right to distribute products under such agreements, we may lose access to certain products and lose a
competitive advantage. Potential competitors could sell products from vendors that we fail to continue with and erode our market share.

We rely substantially on third-party vendors, and the loss of products or delays in product availability from one or more third-party
vendors could substantially harm our business.

We must contract for the supply of current and future products of appropriate quantity, quality and cost. These products must be available on a
timely basis and be in compliance with any regulatory requirements. Failure to do so could substantially harm our business.

We often purchase products from our vendors under agreements that typically have a term of one year and can be terminated on a periodic
basis. There can be no assurance, however, that our vendors will be able to meet their obligations under these agreements or that we will be
able to compel them to do so. Risks of relying on vendors include:

                If an existing agreement expires or a certain product line is discontinued or recalled, then we would not be able to continue to
             offer our customers the same breadth of products and our sales and operating results would likely suffer unless we are able to find
             an alternate supply of a similar product.

                 Agreements we may negotiate in the future may commit us to certain minimum purchase levels or other spending obligations.
             It is possible we will not be able to create the market


                                                                           11
             demand to meet such obligations, which would create an increased drain on our financial resources and liquidity.

                If market demand for our products increases suddenly, our current vendors might not be able to fulfill our commercial needs,
             which would require us to seek new manufacturing arrangements or fund new sources of supply, and may result in substantial
             delays in meeting market demand. If we consistently generate more demand for a product than a given vendor is capable of
             handling, it could lead to large backorders and potentially lost sales to competitive products that are more readily available.

                We may not be able to control or adequately monitor the quality of products we receive from our vendors. Poor quality
             products could damage our reputation with our customers.

                Some of our third party vendors are subject to ongoing periodic unannounced inspection by regulatory authorities, including
             the Food and Drug Administration (“FDA”), the US Department of Agriculture (“USDA”), the Environmental Protection Agency
             (“EPA”), the Drug Enforcement Agency (“DEA”) and other federal and state agencies for compliance with strictly enforced
             regulations. We do not have control over our vendors’ compliance with these regulations and standards. Violations could
             potentially lead to interruptions in supply that could lead to lost sales to competitive products that are more readily available.

Potential problems with vendors such as those discussed above could substantially decrease sales of our products, lead to higher costs and
damage our reputation with our customers.

We rely upon third parties to ship products to our customers and interruptions in their operations could harm our business, financial
condition and results of operations.

We use United Parcel Service, Inc., or UPS, as our primary delivery service for our air and ground shipments of products to our customers. If
there were any significant service interruptions, there can be no assurance that we could engage alternative service providers to deliver these
products in either a timely or cost-efficient manner, particularly in rural areas where many of our customers are located. Any labor disputes,
slowdowns, transportation disruptions or other adverse conditions in the transportation industry experienced by UPS could impair or disrupt
our ability to deliver our products to our customers on a timely basis, and could have a material adverse effect upon our customer relationships,
business, financial condition and results of operations. For example, during the strike by members of the International Brotherhood of
Teamsters against UPS in August 1997, many of our sales representatives, some traveling hundreds of miles, were required to make deliveries
to customers for which no alternative delivery service provider was available on a timely basis. In addition, rising fuel costs may result in
continued increases in shipping costs charged by UPS, or other delivery service providers, and could have an adverse effect on our financial
condition and results of operations.

The loss of one or more significant customers could adversely affect our profitability.

Banfield — The Pet Hospital (“Banfield”) and Feeders’ Advantage L.L.C. (“Feeders’ Advantage”), a related party, our two largest customers,
accounted for approximately 10% and 6% of our product sales for our fiscal year ended September 30, 2005, respectively, and 9% and 6% for
the six-months ended March 31, 2006, respectively. Our ten largest customers, excluding Banfield and Feeders’ Advantage, accounted for
approximately 6% of our product sales for our fiscal year ended September 30, 2005 and 6% for the six-months ended March 31, 2006. Our
business and results of operations could be adversely affected if the business of these customers was lost. We cannot guarantee that we will
maintain or improve our relationships with these customers or that we will continue to supply these customers at


                                                                          12
current levels. Banfield, Feeders’ Advantage and other customers may seek to purchase some of the products that we currently sell directly
from the vendors or from one or more of our competitors. Furthermore, our customers are not required to purchase any minimum amount of
products from us. The loss of Banfield or Feeders’ Advantage or a deterioration in our relations with either of them could significantly affect
our financial condition and results of operations. Additionally, a deterioration in the financial condition of one or more of our customers could
have a material adverse effect on our results of operations.

Failure to effectively manage growth could impair our business.

Since fiscal 2000, we have experienced rapid growth and expansion, largely due to internal growth initiatives. Our revenues increased from
$195.6 million for our fiscal year ended September 30, 2000 to $496.7 million for our fiscal year ended September 30, 2005. Our number of
employees increased by approximately 300 individuals during the same period.

It may be difficult to manage such rapid growth in the future, and our future success depends on our ability to implement and/or maintain:

                sales and marketing programs;

                customer service levels;

                current and new product and service lines and vendor relationships;

                technological support which equals or exceeds our competitors;

                recruitment and training of new personnel; and

                operational and financial control systems.

Our ability to successfully offer products and services and implement our business plan in a rapidly evolving market requires an effective
planning and management process. We expect that we will need to continue to improve our financial and managerial controls and reporting
systems and procedures and to expand the training of our work force. While we believe our current systems have sufficient capacity to meet our
projected needs, we may need to increase the capacity of our current systems to meet additional or unforeseen demands.

If we are not able to manage our rapid growth, there is a risk our customer service quality could deteriorate which may in turn lead to decreased
sales or profitability. Also, the cost of our operations could increase faster than growth in our revenues, negatively impacting our profitability.

Difficulties with the integration of acquisitions may impose substantial costs and delays and cause other unanticipated problems for us.

Acquisitions involve a number of risks relating to our ability to integrate an acquired business into our existing operations. The process of
integrating the operations of an acquired business, particularly its personnel, could cause interruptions to our business. Some of the risks we
face include:

                the need to spend substantial operational, financial and management resources in integrating new businesses, technologies and
             products, and difficulties management may encounter in integrating the operations, personnel or systems of the acquired business;


                                                                           13
                retention of key personnel, customers and vendors of the acquired business;

                the occurrence of a material adverse effect on our existing business relationships with customers or vendors, or both, resulting
             from future acquisitions or business combinations could lead to a termination of or otherwise affect our relationships with such
             customers or vendors;

                impairments of goodwill and other intangible assets; and

               contingent and latent risks associated with the past operations of, and other unanticipated costs and problems arising in, an
             acquired business.

If we are unable to successfully integrate the operations of an acquired business into our operations, we could be required to undertake
unanticipated changes. These changes could have a material adverse effect on our business.

Increases in over-the-counter sales of animal health products could adversely affect our business.

We rely, and will continue to rely, on animal owners who purchase their animal health products directly from veterinarians, which we refer to
as the ethical channel. There can be no assurance that animal owners will continue to use the ethical channel with the same frequency as they
have in the past, and will not increasingly purchase animal health products from sources other than veterinarians, such as the Internet and other
over-the-counter channels. Increased competition from any distributor of animal health products making use of an over-the-counter channel
could significantly reduce our market share and adversely impact our financial results.

If we fail to comply with or become subject to more onerous government regulations, our business could be adversely affected.

The veterinary distribution industry is subject to changing political and regulatory influences. Both state and federal government agencies
regulate the distribution of certain animal health products and we are subject to regulation, either directly or indirectly, by the FDA, the USDA,
the EPA, the DEA and state boards of pharmacy as well as comparable state agencies. The regulatory stance these agencies take could change.
Our vendors are subject to regulation by the FDA, the USDA, the EPA and the DEA, as well as other federal and state agencies, and material
changes to the applicable regulations could affect our vendors’ ability to manufacture certain products, which could adversely impact our
product supply. In addition, some of our customers may rely, in part, on farm and agricultural subsidy programs. Changes in the regulatory
positions that impact the availability of funding for such programs could have an adverse impact on our customers’ financial positions, which
could lead to decreased sales.

We strive to maintain compliance with these and all other applicable laws and regulations. For example, we have hired a Manager of
Regulatory Compliance and we have engaged an outside consultant to assist us in meeting and complying with the various state licensure
requirements to which we are subject. If we are unable to maintain or achieve compliance with these laws and regulations, we could be subject
to substantial fines or other restrictions on our ability to provide competitive distribution services, which could have an adverse impact on our
financial condition.

We cannot assure you that existing laws and regulations will not be revised or that new, more restrictive laws will not be adopted or become
applicable to us or the products that we distribute or dispense. We cannot assure you that the vendors of products that may become subject to
more stringent laws will not try to recover any or all increased costs of compliance from us by increasing the prices at which we


                                                                           14
purchase products from them, or, that we will be able to recover any such increased prices from our customers. We also cannot assure you that
our business and financial condition will not be materially and adversely affected by future changes in applicable laws and regulations.

Loss of key management or sales representatives could harm our business.

Our future success depends to a significant extent on the skills, experience and efforts of management, including our President and Chief
Executive Officer, Mr. James F. Cleary, Jr. While we have not experienced problems in the past attracting and maintaining members of our
management team, the loss of any or all of these individuals could adversely impact our business. We do not carry key-man life insurance on
any member of management. In addition we do not have employment agreements with key members of our senior management team. We must
continue to develop and retain a core group of individuals if we are to realize our goal of continued expansion and growth. We cannot assure
you that we will be able to do so in the future.

Also, due to the specialized nature of our products and services, generally only highly qualified and trained sales representatives have the
necessary skills to market our products and provide our services. These individuals develop relationships with our customers that could be
damaged if these employees are not retained. We face intense competition for the hiring of these professionals. Any failure on our part to hire,
train and retain a sufficient number of qualified professionals would damage our business. We do not generally enter into agreements that
contain non-competition provisions with any of our employees, other than with members of our senior management team.

Failure of, or security problems with, our information systems could damage our business.

Our information systems are dependent on third party software, global communications providers, telephone systems and other aspects of
technology and Internet infrastructure that are susceptible to failure. Though we have implemented security measures and some redundant
systems, our customer satisfaction and our business could be harmed if we or our vendors experience any system delays, failures, loss of data,
power outages, computer viruses, break-ins or similar disruptions. We currently process all customer transactions and data at our facilities in
Meridian, Idaho. Although we have safeguards for emergencies, including, without limitation, sophisticated back-up systems, the occurrence of
a major catastrophic event or other system failure at any of our distribution facilities could interrupt data processing or result in the loss of
stored data. This may result in the loss of customers or a reduction in demand for our services. Only some of our systems are fully redundant
and although we do carry business interruption insurance, it may not be sufficient to compensate us for losses that may occur as a result of
system failures. If a disruption occurs, our profitability and results of operations may suffer.

The outbreak of an infectious disease within either the production animal or companion animal population could have a significant
adverse effect on our business and our results of operations.

An outbreak of disease affecting animals, such as foot-and-mouth disease, avian influenza or bovine spongiform encephalopathy, commonly
referred to as “mad cow disease,” could result in the widespread destruction of affected animals and consequently result in a reduction in
demand for animal health products. In addition, outbreaks of these or other diseases or concerns of such diseases could create adverse publicity
that may have a material adverse effect on consumer demand for meat, dairy and poultry products, and, as a result, on our customers’ demand
for the products we distribute. The outbreak of a disease among the companion animal population which could cause a reduction in the demand
for companion animals could also adversely affect our business. Although we have not been adversely impacted by the outbreak of a disease in
the past, there can be no assurance that a future outbreak of an infectious disease will not have an adverse effect on our business.


                                                                          15
We may be subject to product liability and other claims in the ordinary course of business.

Our business involves a risk of product liability and other claims in the ordinary course of business, for example arising from shipping
mislabeled or outdated product. We maintain general liability insurance with policy limits of $1 million per incident and $2 million in the
aggregate, and in many cases we have indemnification rights against such claims from the manufacturers of the products we distribute. We do
not maintain a separate product liability insurance policy because we do not currently manufacture any of the products that we sell. Our ability
to recover under insurance or indemnification arrangements is subject to the financial viability of the insurers and manufacturers. We cannot
assure you that our insurance coverage or the manufacturers’ indemnity will be available or sufficient in any future cases brought against us.

A prolonged economic downturn could materially adversely affect our business.

Our business may be materially adversely affected by prolonged, negative trends in the general economy that could reduce consumer
discretionary spending on animal health products. Our business ultimately depends on the ability and willingness of animal owners to pay for
our products. This dependence could make us more vulnerable to any reduction in consumer confidence or disposable income than companies
in other industries that are less reliant on consumer spending, such as the human health care industry, in which a large portion of payments are
made by insurance programs.

We may not be able to raise needed capital in the future on favorable terms or at all.

We expect that our existing sources of cash, together with any funds generated from operations, will be sufficient to meet our anticipated
capital needs for at least the next twelve months. However, we may require additional capital to finance our growth strategies or other activities
in the future. Our capital requirements will depend on many factors, including the costs associated with our growth and expansion. Additional
financing may not be available when needed and, if such financing is available, it may not be available on terms favorable to us. Our failure to
raise capital when needed could have an adverse effect on our business, financial condition and results of operations.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Certain of our borrowings, primarily borrowings on the revolving credit facility under our amended credit agreement, are or will be at variable
rates of interest and expose us to interest rate risk based on market rates. In the last year there has been a general increase in borrowing rates in
the United States. If interest rates continue to increase, our debt service obligations on any future variable rate indebtedness we may incur on
our revolving credit facility would increase even if the amount borrowed remained the same, and our net income and cash available for
servicing our indebtedness would decrease. Our variable rate debt as of March 31, 2006 was approximately $25.0 million (comprised of $24.7
million credit facility and $389,232 promissory note). Our interest expense for fiscal year 2005 was $2.5 million (excluding $4.1 million of
accretion of our Series A preferred stock dividends) and was $1.1 million for the six-months ended March 31, 2006. A 1% increase in the
average interest rate would increase future interest expense by approximately $250,000 per year assuming an average outstanding balance on
our revolving credit facility of $25.0 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Liquidity and Capital Resources.”


                                                                            16
The requirements of being a public company may strain our resources and distract our management.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
and the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. These requirements place a strain on our systems and resources. The
Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The
Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls for financial reporting. We are
in the process of documenting and testing our internal control procedures in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act, which requires annual management assessments of the effectiveness of our internal controls over financial reporting and a
report by our independent registered public accountants addressing these assessments. During the course of our testing, we may identify
deficiencies which we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the
requirements of Section 404. We will be required to comply with the requirements of Section 404 for our fiscal year ending September 30,
2006. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or
amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls
over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

As well, in order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial
reporting, significant resources and management oversight will be required. This may divert management’s attention from other business
concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

                                                    Risks Associated With This Offering

Concentration of ownership among our existing executives, directors and principal stockholders may prevent new investors from
influencing significant corporate decisions.

Upon completion of this offering, Bruckmann, Rosser, Sherrill & Co. II, L.P., or BRS, and Agri Beef Co. will beneficially own approximately
15% and 6%, respectively, of our outstanding common stock, and our executives, directors and principal stockholders, including BRS and Agri
Beef Co., will beneficially own, in the aggregate, approximately 30% of our outstanding common stock. As a result, these stockholders will be
able to exercise influence over all matters requiring stockholder approval, including the election of directors, amendment of our certificate of
incorporation and approval of significant corporate transactions and will have significant control over our management and policies. The
directors elected by these stockholders will be able to make decisions affecting our capital structure, including decisions to issue additional
capital stock, implement stock repurchase programs and incur indebtedness. This influence may have the effect of deterring hostile takeovers,
delaying or preventing changes in control or changes in management, or limiting the ability of our other stockholders to approve transactions
that they may deem to be in their best interest.

Management intends to use the proceeds of this offering in ways with which you may not agree and in ways that may not yield a return
to you.

We intend to use the net proceeds from the offering of common stock by us in this offering to repay borrowings on our revolving credit facility
under our amended credit facility and the remainder, if any, for general corporate purposes. See “Use of Proceeds.” After the repayment of
borrowings under our revolving credit facility, none or a small portion of the net proceeds of the offering of common stock by us in this
offering will be available for our operations or to further our business or growth strategies.


                                                                          17
The price of our common stock may be volatile.

The market price of our common stock has been subject to significant fluctuations and may continue to fluctuate or decline. From our initial
public offering in August 2005 to July 5, 2006, the closing price of our common stock has ranged from a low of $17.00 to a high of $37.29.
The stock market has from time to time experienced significant price and volume fluctuations that have affected the market prices of securities.
These fluctuations often have been unrelated or disproportionate to the operating performance of publicly traded companies. In the past,
following periods of volatility in the market price of a particular company’s securities, securities class-action litigation has often been brought
against that company. We may become involved in this type of litigation in the future. Litigation of this type is often expensive to defend and
may divert management’s attention and resources from the operation of our business.

Future sales of shares of our common stock in the public market by our stockholders or issuances of equity or convertible securities by
us, may depress our stock price and make it difficult for you to recover the full value of your investment in our shares.

If our existing stockholders sell additional amounts of our common stock in the public market following this offering, if we issue additional
shares of common stock or convertible debt securities to raise additional capital or if there is a perception that these sales or issuances may
occur, the market price of our common stock could decline. In addition, if we issue additional shares of common stock, your percentage of
ownership in us would be reduced. We cannot predict the size of future issuances or sales of common stock or the effect, if any, that future
issuances and sales of shares of our common stock may have on the market price of our common stock. Upon completion of this offering we
will have outstanding approximately 11,592,793 shares of common stock. The shares of common stock sold in this offering not purchased by
affiliates will be freely tradable, without restriction, in the public market. After the lockup agreements pertaining to this offering expire 90 days
from the date of this prospectus unless waived, an additional 3,360,359 shares will be eligible for sale in the public market at various times,
subject to volume limitations under Rule 144 of the Securities Act of 1933, or the Securities Act.

You will incur immediate and substantial dilution as a result of this offering.

Investors purchasing shares of our common stock in this offering will pay more for their shares than the amount paid by stockholders who
acquired shares prior to this offering. Investors in this offering will contribute 28% of our total capitalization but will only beneficially own, in
the aggregate, approximately 8% of our outstanding common stock and control approximately 8% of the voting rights with respect to our
common stock following completion of this offering. In addition, this offering price is substantially higher than the net tangible book value per
share of our common stock immediately after this offering. As a result, you will pay a price per share that substantially exceeds the net tangible
book value of our assets after subtracting our liabilities. At an offering price of $35.40, you will incur immediate and substantial dilution in an
amount of $27.45 per share.

Takeover defense provisions may adversely affect the market price of our common stock.

Various provisions of Delaware corporation law and of our corporate governance documents may inhibit changes in control not approved by
our board of directors and may have the effect of depriving you of an opportunity to receive a premium over the prevailing market price of our
common stock in the event of an attempted hostile takeover. In addition, the existence of these provisions may adversely affect the market price
of our common stock. These provisions include:

                 a prohibition on stockholder action through written consents;


                                                                            18
                a requirement that special meetings of stockholders be called only by our board of directors;

                advance notice requirements for stockholder proposals and nominations; and

                availability of “blank check” preferred stock.

We do not intend to pay dividends in the foreseeable future.

We do not currently pay any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future.
We intend to retain future earnings to fund our growth. Accordingly, you will receive a return on your investment in our common stock only if
our common stock appreciates in value. You may therefore not realize a return on your investment even if you sell your shares.


                                                                         19
                                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts,
including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements
preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,”
“target,” “project,” “intend” and similar expressions. These statements include, among others, statements regarding our expected business
outlook, anticipated financial and operating results, our business strategy and means to implement our strategy, our objectives, the amount and
timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and
sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s
beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking
statements include, among others assumptions regarding demand for our products, the expansion of product offerings geographically or
through new applications, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These
assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause
actual results that differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to
control or predict. Such factors include, but are not limited to, the following:

                vendor rebates based upon attaining certain growth goals;

                changes in or availability of vendor rebate programs;

                changes in the way vendors introduce products to market;

                the recall of a significant product by one of our vendors;

                extended shortage or backlog of a significant product by one of our vendors;

                seasonality;

                the impact of general economic trends on our business;

                the timing and effectiveness of marketing programs offered by our vendors;

                the timing of the introduction of new products and services by our vendors; and

                competition.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and
Exchange Commission, or SEC, we are under no obligation to publicly update or revise any forward-looking statements after we distribute this
prospectus, whether as a result of any new information, future events or otherwise. Potential investors should not place undue reliance on our
forward-looking statements. Before you invest in our common stock, you should be aware that the occurrence of the events described in the
“Risk Factors” section and elsewhere in this prospectus could harm our business, prospects, operating results, and financial condition. Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results or performance.


                                                                          20
                                                             USE OF PROCEEDS

We will not receive any proceeds from the sale of our common stock offered by the selling stockholders in this offering. We estimate that the
net proceeds to us from the sale of the 869,565 shares of common stock offered by us in this offering will be approximately $28.5 million, or
$32.9 million if the underwriters exercise their over-allotment option in full, after deducting underwriting discounts and commissions and our
estimated fees and expenses. We intend to utilize our net proceeds from this offering to repay our borrowings outstanding on the revolving
credit facility under our amended credit agreement and the remainder, if any, for general corporate purposes. We are not required to pay down
the borrowings on our revolving credit facility prior to the maturity date of our amended credit agreement, which is June 18, 2007.

As of March 31, 2006, there were $24.7 million of borrowings outstanding under our amended credit agreement. The revolving credit facility
bears interest at one of the following rates: the London Interbank Offered Rate, or LIBOR, plus a margin on the portion converted to LIBOR in
accordance with our amended credit agreement, currently $20 million (6.3% at March 31, 2006); and the remaining $4.7 million bears interest
at the prime rate (7.75% at March 31, 2006).

                                                              DIVIDEND POLICY

We have never paid or declared any dividends on our common stock. We do not anticipate paying any dividends on our common stock in the
foreseeable future. Our amended credit agreement prohibits us from declaring or paying dividends on our common stock. We currently intend
to retain future earnings to finance the ongoing operations and growth of our business. Any future determination relating to our dividend policy
will be made at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, results of
operations, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.

                                                   PRICE RANGE OF COMMON STOCK

Our common stock has been quoted on the Nasdaq National Market under the symbol “MWIV” since August 3, 2005. Prior to that date there
was no public market for our common stock. The following table sets forth, for the period indicated, the high and low sales prices of our
common stock reported by the Nasdaq National Market.

                                                                                                      Common Stock Price
                                                                                               High                             Low
Fiscal Year Ended September 30, 2005
  Fourth Quarter (from August 3, 2005)                                                    $           24.18                $          19.78
Fiscal Year Ended September 30, 2006
  First Quarter                                                                           $           26.49                $          19.87
  Second Quarter                                                                          $           36.31                $          23.79
  Third Quarter                                                                           $           37.29                $          29.25
  Fourth Quarter (through July 5, 2006)                                                   $           36.02                $          34.74


On July 5, 2006, the last reported sale price of our common stock on the Nasdaq National Market was $35.40 per share. As of March 31, 2006
there were approximately 15 holders of record of our common stock.


                                                                           21
Equity Compensation Plan Information

The following table provides information as of March 31, 2006 about the common stock that may be issued under all of our existing equity
compensation plans, including the 2002 Stock Option and 2005 Stock-Based Incentive Compensation Plans. Both of these plans have been
approved by our stockholders.

                                                                                                               Number of securities
                                                                                                             Remaining available for
                                Number of securities to                                                    future issuance under equity
                                be issued upon exercise           Weighted-average exercise                    compensation plans
                                of outstanding options,          price of outstanding options,           (excluding securities reflected in
                                 warrants and rights                 warrants and rights                            column (a))
                                          (a)                                  (b)                                      (c)
Equity compensation plans
 approved by security
 holders                                  559,048                   $                 3.84                                1,130,394
Equity compensation plans
 not approved by security
 holders                                       —                                        —                                        —
Total                                     559,048                   $                 3.84                                1,130,394



                                                                         22
                                                             CAPITALIZATION

The following table sets forth as of March 31, 2006 our consolidated cash and our consolidated capitalization on an actual basis and as adjusted
to give effect to the sale of the shares of our common stock offered by us hereby and the anticipated use of the net proceeds thereof as if these
events had been completed on March 31, 2006. This table should be read in conjunction with “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” our selected consolidated financial data and our consolidated financial statements and the
related notes to those statements included in this prospectus.
                                                                                                      As of March 31, 2006
                                                                                                     Actual        As Adjusted
                                                                                                            (unaudited)
                                                                                                      (in thousands, except
                                                                                                       per share amounts)
          Cash                                                                                     $         34    $      3,928
          Long-term debt:
            Revolving credit facility                                                                   24,654                  —
            Term debt including current portion                                                            389                 389
               Total long-term debt                                                                     25,043                 389
          Stockholders’ equity:
            Common stock, $0.01 par value; 20,000 shares authorized, 10,593 shares issued
               and outstanding, actual; 20,000 shares authorized and 11,462 shares issued
               and outstanding, as adjusted                                                                106                115
          Additional paid-in capital                                                                    78,721            107,260
          Retained earnings                                                                             14,986             14,986
               Total stockholders’ equity                                                               93,813            122,361
               Total capitalization (excluding cash)                                               $   118,856       $    122,750


The outstanding share information in the table above is based on the number of shares outstanding as of March 31, 2006. This table excludes
559,048 shares of common stock issuable upon exercise of outstanding options as of March 31, 2006 at a weighted average exercise price of
$3.84 per share.


                                                                          23
                                                     SELECTED FINANCIAL DATA

The selected consolidated financial and operating data below are derived from the following sources:

                The consolidated financial statements of our company while it was operated by Agri Beef Co. (which we refer to as our
             Predecessor) for the fiscal year ended September 30, 2001 and for the period from October 1, 2001 to June 17, 2002. Our
             Predecessor’s financial statements, which have been audited by an independent registered public accounting firm, represent our
             results of operations for those periods.

                Our consolidated financial statements for the period from June 18, 2002 to September 30, 2002 and as of and for our fiscal
             years ended September 30, 2003, 2004 and 2005, which have been audited by an independent registered public accounting firm.

                Our unaudited interim condensed consolidated financial statements as of March 31, 2006 and for the six-months ended
             March 31, 2005 and 2006, which in the opinion of management reflect all adjustments necessary, to present fairly, in accordance
             with generally accepted accounting principles in the United States, the information for such periods and which have been
             reviewed by an independent registered public accounting firm. The operating results of the interim periods are not necessarily
             indicative of results for a full year.


                                                                         24
The selected consolidated financial and operating data below represent portions of our financial statements and are not complete. You should
read this information together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our
consolidated financial statements and the related notes to these statements included in this prospectus. Historical results are not necessarily
indicative of future performance.

                                                                                                                                                                      Six-Months Ended
                                                                                                                                                                          March 31,
                                              2001                            2002                                2003           2004             2005                2005         2006
                                                     Predecessor                                                              Successor
                                                           Oct. 1, 2001 -             Jun. 18, 2002 -
                                                           Jun. 17, 2002               Sept. 30, 2002
                                                                                     (in thousands, except per share data)
    Revenues:
       Product sales                      $   219,407      $      177,135             $       84,467          $   315,738     $   367,863     $       463,272     $   210,148      $    260,303
       Product sales to related
           party                                   —               9,947                      7,329                22,960          22,163              28,473          12,947           17,356
       Commissions                              2,006              1,268                      1,009                 3,011           4,256               4,910           2,309            3,506
           Total revenues                     221,413            188,350                     92,805               341,709         394,282             496,655         225,404          281,165
    Cost of product sales                     188,260            161,840                     80,032               294,692         338,684             426,709         192,308          238,485
    Gross profit                               33,153             26,510                     12,773                47,017          55,598              69,946          33,096           42,680
    Selling, general and administrative
      expenses (1)                             25,009             20,082                     11,115                35,886          41,872              52,647          23,819           29,712
    Depreciation and amortization                 835                577                        285                   976           1,146               1,528             727              915
      Operating income                          7,309              5,851                      1,373                10,155          12,580              15,771           8,550           12,053
    Other income (expense):
      Interest expense (2)                     (1,255 )              (731 )                       (644 )           (3,034 )        (6,098 )            (6,515 )         (3,545 )        (1,133 )
      Other income (expense)                     (146 )               203                           59                324             322                 399              183             309
         Total other income (expense)          (1,401 )              (528 )                       (585 )           (2,710 )        (5,776 )            (6,116 )         (3,362 )          (824 )
    Income before taxes                         5,908               5,323                          788              7,445           6,804               9,655            5,188          11,229
    Income taxes                               (2,246 )            (2,043 )                       (297 )           (3,116 )        (4,280 )            (5,098 )         (2,937 )        (4,435 )
    Net income                                  3,662               3,280                          491              4,329           2,524               4,557            2,251           6,794
    Accretion of redeemable preferred
      stock                                          —                 —                          (995 )           (2,714 )           —                   —                —                 —
    Income (loss) available to common
      stockholders                        $     3,662      $        3,280             $           (504 )      $     1,615     $     2,524     $         4,557     $      2,251     $      6,794

    Earnings (loss) per common share:
       Basic                                     NM                  NM               $           (0.10 )     $       0.32    $      0.50     $          0.76     $       0.44     $       0.64
       Diluted                                   NM                  NM               $           (0.10 )     $       0.28    $      0.43     $          0.68     $       0.38     $       0.62
    Shares used in computing earnings
       per share:
       Basic                                     NM                  NM                         4,978               5,013           5,038               5,970           5,062           10,582
       Diluted                                   NM                  NM                         4,978               5,745           5,878               6,697           5,880           10,873



                                                                                                                                                                                  As of
                                                                                          As of September 30,                                                                    March 31,
                                                              2001                   2002             2003                  2004                         2005                      2006
                                                           Predecessor                                                     Successor
 Cash                                                      $        33           $         36         $          36      $         28             $            31            $              34
 Working capital (3)                                            16,000                 (6,694 )              (1,027 )           5,853                      47,899                       54,156
 Total assets                                                   79,715                115,070               122,270           146,565                     188,244                      189,080
 Total debt                                                     14,155                 41,719                33,972            50,149                      25,177                       25,043
 Redeemable preferred
    stock                                                             —                27,495                31,494               35,733                       —                            —
 Total stockholders’ equity                                       17,962                  353                 2,113                4,632                   86,694                       93,813


footnotes on the following page



                                                                                            25
                                                                                                                                                                Six Months
                                                                                                                                                                  Ended
                                                                           Year Ended September 30,                                                             March 31,
                                    2001                                     2002                                       2003       2004           2005        2005      2006
                                                Predecessor                                                              Successor
                                                     October 1, 2001 -                  June 18, 2002 -
                                                       June 17, 2002                  September 30 , 2002
 Other Data:
   Product sales from
      Internet as a
      percentage of
      sales (4)                        —                           16 %                             19 %                  18 %         18 %         21 %        21 %        23 %
   Field sales
      representatives
      (at end of period)               71                          82                               82                    94          111         134          135         142
   Telesales representatives
      (at end of period)               47                          63                               69                    75           79           93          90          95
   Warehouses                           7                           8                                8                     8            9           10          10          10
   Fill rate (5)                       98 %                        98 %                             98 %                  98 %         98 %         98 %        98 %        98 %


(1)                  Includes management fees expense of $250, $386 and $2,456 for our fiscal years ended September 30, 2003, 2004 and 2005, respectively, and $266 and $0 for
             the six-months ended March 31, 2005 and 2006, respectively as a result of payments to BRS and Agri Beef Co. The management and consulting services agreement
             was terminated in August 2005 for a termination fee of $2,000 that is included in the management fee expense of $2,456 for fiscal year ended September 30, 2005.

(2)                   Includes accretion of our Series A preferred stock dividends beginning on July 1, 2003, which is nondeductible for income tax purposes. Accretion expense
             included as a component of interest expense was $999, $4,239 and $4,055 for fiscal years ended September 30, 2003, 2004 and 2005, respectively and $2,315 and $0
             for the six-months ended March 31, 2005 and 2006, respectively. We used a portion of the proceeds from our initial public offering in August 2005 to redeem all the
             Series A preferred stock.

(3)                 Defined as current assets minus current liabilities.

(4)                 Information for our fiscal year ended September 30, 2001 is not readily available.

(5)                  Defined as, for any period, the dollar value of orders shipped the same day they were placed from any warehouse expressed as a percentage of the total dollar
             value of the orders placed by customers in the period.

      “NM,” as used in the table above, means not meaningful because of the substantial changes to our capital structure resulting from our
      acquisition of MWI Veterinary Supply Co. from Agri Beef Co. effective as of June 18, 2002.


                                                                                             26
                                  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
                                        CONDITION AND RESULTS OF OPERATIONS

This prospectus contains forward-looking statements that involve risks and uncertainties. Actual events or results may differ materially from
those indicated in such forward-looking statements. The following discussion of the financial condition and results of our operations should be
read in conjunction with our consolidated financial statements and the related notes to those statements included in this prospectus.

All dollar amounts are presented in thousands except for per share amounts.

Overview

We are a leading distributor of animal health products to veterinarians across the United States. We market our products to veterinarians in both
the companion and production animal markets. Our growth has primarily been from internal growth initiatives and, to a lesser extent, selective
acquisitions.

Historically, approximately two-thirds of our total revenues have been generated from sales of companion animal products and one-third from
production animal products. We intend to continue to support production animal veterinarians with a broad range of products and value-added
services, however, the increasing maturity of the production animal market results in lower margins on product sales relative to the companion
animal market. We intend to increase our focus on the companion animal market, which we believe is growing due to the increasing number of
households with companion animals, increased expenditures on animal health and preventative care, an aging pet population, advancements in
pharmaceuticals and diagnostic testing and extensive marketing programs sponsored by companion animal nutrition and pharmaceutical
companies. See “Our Business — Our Industry.” While the average order size for companion animal health products is often smaller than
production animal health products, companion animal health products typically have higher margins.

We sell products that we source from our vendors to our customers through either a “buy/sell” transaction or an agency relationship with our
vendors. In a “buy/sell” transaction, we purchase or take inventory of products from our vendors. When a customer places an order with us, we
pick, pack, ship and invoice the customer for the order. We record sales from “buy/sell” transactions, which account for the vast majority of our
business, as revenues in conformity with generally accepted accounting principles in the United States. In an agency relationship, we do not
purchase and take inventory of products from our vendors. When we receive an order from our customer, we transmit the order to our vendor,
who picks, packs and ships the order to our customer. In some cases, our vendor invoices and collects payment from our customer, while in
other cases we invoice and collect payment from our customer on behalf of our vendor. We receive a commission payment for soliciting the
order from our customer and for providing other customer service activities. The aggregate revenues we receive in agency transactions
constitute the “commissions” line item on our statement of income and is recorded in conformity with accounting principles generally accepted
in the United States. Our vendors determine the method we use to sell our products. Historically, vendors have occasionally switched between
the “buy/sell” and agency models for particular products in response to market conditions related to that particular product. A switch between
models can impact our revenues and our operating income. We cannot know in advance when a vendor will switch between the “buy/sell” and
agency models or what impact, if any, such a change may have. A switch can occur even with vendors with whom we have written agreements,
because most of our agreements with vendors have relatively short terms and are terminable with or without cause on short notice, normally 30
to 90 days. The impact of any individual change from a “buy/sell” to an agency model depends on the costs and expenses associated with a
particular product, and can have either a positive or a negative effect on our profitability.


                                                                          27
When we negotiate vendor contracts for the upcoming year, our vendors typically establish sales growth goals for us to meet to receive
performance rebates. Since many of our vendors’ rebate programs are based on a calendar year, historically the three-months ended
December 31 has been our most significant quarter for recognition of rebates. Vendor rebates based on sales are classified in our accompanying
consolidated statements of income as a reduction to cost of product sales at the time the sales performance measures are achieved. Purchase
rebates are measured against inventory purchases from the vendors and are a reduction of inventory until the product is sold. When the
inventory is sold, purchase rebates are recognized as a reduction to cost of product sales. During calendar year 2006, certain of our vendors
modified their rebate programs with us. These rebate program modifications changed the revenue growth targets from annual-weighted
calendar year targets to either quarterly or trimester growth targets. These modifications will result in rebates previously expected to be earned
and recognized in our first fiscal quarter ending December 31 (or the fourth calendar quarter) to be recognized earlier in our fiscal year 2006.

Total Revenues. Our total revenues increased from $221,413 for our fiscal year ended September 30, 2001 to $496,655 for our fiscal year
ended September 30, 2005. Our revenue growth has been driven by our ability to offer a broad product selection at competitive prices with high
levels of customer service and support and an expansion in the number of veterinary practices to which we distribute products. We have
continually added new vendor relationships to expand our product offering and field sales representatives to increase our customer reach,
principally in the Southwest, Southeast, Northeast and Midwest regions of the United States. We increased the number of products we
distributed from over 8,000 products at September 30, 2000 to over 10,000 at March 31, 2006. We also increased our field representatives from
59 at September 30, 2000 to 142 at March 31, 2006.

Operating Expenses. Our selling, general and administrative expenses increased from $25,009 for our fiscal year ended September 30, 2001
to $52,647 for our fiscal year ended September 30, 2005. Selling, general and administrative expenses consist mainly of payroll and benefits,
warehouse operating supplies, occupancy expenses and other general corporate expenses. Our selling, general and administrative expenses as a
percentage of total revenues were 10.6% for our fiscal year ended September 30, 2005, compared to 11.3% for the same period in 2001.
Historically, our selling, general and administrative expenses have grown at a slower rate than our revenues, which has been a contributing
factor to our increasing profitability. By leveraging our existing infrastructure, we have been able to increase our revenues without having to
invest in additional management personnel or facilities at the same rate.

Initial Public Offering. On August 3, 2005, we completed our initial public offering in which we sold an aggregate of 4,983,334 shares
(including the exercise of the underwriters’ over-allotment option) of our common stock at a price of $17 per share. We received net proceeds
of $77,159 after deducting the underwriting discounts and offering expenses. We used the net proceeds to redeem all of our Series A preferred
stock for approximately $39,789 and to repay approximately $37,370 of borrowings outstanding on our revolving credit facility under our
amended credit agreement.

Acquisitions. On November 1, 2004, we acquired certain assets of Memorial Pet Care, Inc., a pet crematorium located in Meridian, Idaho.
Memorial Pet Care presently operates in southwestern Idaho and eastern Oregon and serves veterinary practices and their clients by providing
pet cremation services.

On January 3, 2005, we acquired substantially all of the assets of Vetpo Distributors, Inc. (“Vetpo”), a regional animal health products
distributor located in Holland, Michigan. This acquisition has enabled us to substantially expand our market presence and improve our
distribution capabilities in Michigan, Illinois, Indiana, Ohio and Wisconsin.

On May 8, 2006, we acquired substantially all of the assets of Northland for approximately $4.0 million, consisting of $3.0 million in cash and
28,744 shares of unregistered restricted common stock. The


                                                                          28
acquisition agreement also calls for an adjustment to be paid in cash if Northland’s working capital is greater than or less than a pre-determined
level. Northland is based in Clear Lake, Wisconsin and is a distributor of animal health products to approximately 500 veterinary practices and
producers across the Midwestern United States.

Results of Operations

The following tables summarize our historical results of operations for our fiscal years ended September 30, 2003, 2004 and 2005 and the
six-months ended March 31, 2005 and 2006, on an actual basis and as a percentage of total revenues.

Summary Consolidated Results of Operations Table

                                                                   Year Ended September 30,                                             Six-Months Ended March 31,
                                                   2003        %         2004          %           2005          %               2005           %         2006            %
                                                                                    (in thousands, except per share data.)
         Revenues:
            Product sales                      $   315,738      92.4 % $     367,863      93.3 % $     463,272      93.3 % $     210,148         93.2 % $     260,303      92.6 %
            Product sales to related
               party                                22,960       6.7 %        22,163       5.6 %        28,473       5.7 %        12,947          5.8 %        17,356       6.2 %
            Commissions                              3,011       0.9 %         4,256       1.1 %         4,910       1.0 %         2,309          1.0 %         3,506       1.2 %
               Total revenues                      341,709     100.0 %       394,282     100.0 %       496,655     100.0 %       225,404        100.0 %       281,165     100.0 %
         Cost of product sales                     294,692      86.2 %       338,684      85.9 %       426,709      85.9 %       192,308         85.3 %       238,485      84.8 %
         Gross profit                               47,017      13.8 %        55,598      14.1 %        69,946      14.1 %        33,096         14.7 %        42,680      15.2 %
         Selling, general and administrative
            expenses (1)                            35,886      10.5 %        41,872      10.6 %        52,647      10.6 %        23,819         10.6 %        29,712      10.6 %
         Depreciation and amortization                 976       0.3 %         1,146       0.3 %         1,528       0.3 %           727          0.3 %           915       0.3 %
         Operating income                           10,155       3.0 %        12,580       3.2 %        15,771       3.2 %         8,550          3.8 %        12,053       4.3 %
         Other income (expense):
         Interest expense (2)                       (3,034 )   - 0.9 %        (6,098 )   - 1.6 %        (6,515 )   - 1.3 %        (3,545 )      - 1.6 %        (1,133 )   - 0.4 %
            Earnings of equity method
               investees                               106       0.0 %           104       0.0 %           131       0.0 %            59          0.0 %            82       0.0 %
         Other                                         218       0.1 %           218       0.1 %           268       0.1 %           124          0.1 %           227       0.1 %
         Total other expense                        (2,710 )   - 0.8 %        (5,776 )   - 1.5 %        (6,116 )   - 1.2 %        (3,362 )      - 1.5 %          (824 )   - 0.3 %
         Income before taxes                         7,445       2.2 %         6,804       1.7 %         9,655       2.0 %         5,188          2.3 %        11,229       4.0 %
         Income tax expense                         (3,116 )   - 0.9 %        (4,280 )   - 1.1 %        (5,098 )   - 1.0 %        (2,937 )      - 1.3 %        (4,435 )   - 1.6 %
         Net income                                  4,329       1.3 %         2,524       0.6 %         4,557       1.0 %         2,251          1.0 %         6,794       2.4 %
         Redeemable preferred stock
            accretion                               (2,714 )   - 0.8 %            —        0.0 %            —        0.0 %              —         0.0 %            —        0.0 %
         Income to common
            stockholders                       $     1,615       0.5 % $       2,524       0.6 % $       4,557       1.0 % $       2,251          1.0 % $       6,794       2.4 %

         Earnings per common share:
            Basic                              $      0.32               $      0.50               $      0.76               $      0.44                  $      0.64
            Dilutive                           $      0.28               $      0.43               $      0.68               $      0.38                  $      0.62
         Shares used in earnings
         per share calculation:
            Basic                                    5,013                     5,038                     5,970                     5,062                       10,582
            Dilutive                                 5,745                     5,878                     6,697                     5,880                       10,873


(1)              Includes management fees expense of $250, $386 and $2,456 for our fiscal years ended September 30, 2003, 2004 and 2005, respectively, and $266 and $0 for
         the six-months ended March 31, 2005 and 2006, respectively as a result of payments to BRS and Agri Beef Co. The management and consulting services agreement
         was terminated in August 2005 for a termination fee of $2,000 that is included in the management fee expense of $2,456 for fiscal year ended September 30, 2005.

(2)              Includes accretion of our Series A preferred stock dividends beginning on July 1, 2003, which is nondeductible for income tax purposes. Accretion expense
         included as a component of interest expense was $999, $4,239 and $4,055 for our fiscal years ended September 30, 2003, 2004 and 2005, respectively and $2,315 and
         $0 for the six-months ended March 31, 2005 and 2006, respectively. We used a portion of the proceeds from our initial public offering in August 2005 to redeem all the
         Series A preferred stock.



                                                                                             29
Six-months ended March 31, 2006 Compared to Six-months ended March 31, 2005

Total Revenues. Total revenues increased 24.7% to $281,165 for the six-months ended March 31, 2006 from $225,404 for the six-months
ended March 31, 2005. This increase was attributable to an increase in product sales volumes of a wide variety of products to both existing and
new customers. Revenues attributable to new customers represented approximately 44% of the growth in total revenues during the six-months
ended March 31, 2006. Revenues attributable to existing customers represented approximately 56% of the growth in total revenues during the
six-months ended March 31, 2006. For the purpose of calculating growth rates of new and existing customer revenue, we have defined a new
customer as a customer that did not purchase product from MWI in the corresponding fiscal quarter of the prior year, with the remaining
customer base being considered an existing customer. Revenues from new customers for each fiscal quarter are summed to arrive at the
estimated year-to-date revenue for new customers. Contributing to the growth in revenues to both new and existing customers for the
six-months ended March 31, 2006 as compared to the corresponding period in the prior year was the addition of non-steroidal
anti-inflammatory drugs for dogs, the addition of new cattle antibiotics and the conversion to a “buy/sell” arrangement for an equine West Nile
Virus vaccine that was a commission-based agency relationship for part of the comparative period in the prior year.

Gross Profit. Gross profit increased by 29.0% to $42,680 for the six-months ended March 31, 2006 from $33,096 for the six-months ended
March 31, 2005. The increase in gross profit is a result of increased total revenues as discussed above and increased vendor rebates. Vendor
rebates contributed to the gross profit dollar improvement by $2,929 for the six-months ended March 31, 2006 as compared to the six-months
ended March 31, 2005. Vendor rebates have historically been highest during our first fiscal quarter ended December 31, since certain
significant vendor rebate programs were designed to include annual targets to be achieved based on the calendar year. The growth in vendor
rebates during the six-months ended March 31, 2006 as compared to the six-months ended March 31, 2005 was attributable to our calendar
year sales growth with key vendors and the addition of new programs related to new product offerings. Gross profit as a percentage of total
revenues was 15.2% for the six-months ended March 31, 2006, compared to 14.7% for the same period in the prior year. The increase in our
gross profit as a percentage of total revenues was primarily due to an increase in vendor rebates and an increase in commission revenue on
agency products sold. Partially offsetting these improvements were increases in freight costs as a result of higher fuel and transportation costs.

Selling, General and Administrative Expenses (“SG&A”). SG&A expenses increased 24.7% to $29,712 for the six-months ended March 31,
2006 from $23,819 for the six-months ended March 31, 2005. This increase was primarily due to increased compensation costs, outside fees
and services, location and travel and occupancy costs. Compensation costs increased due to the addition of 74 employees primarily in our
distribution centers, corporate office and sales force. Additionally, the increase in compensation cost was affected by 50 employees that joined
us in January 2005 in connection with the acquisition of Vetpo Distributors, Inc. Compensation costs also increased as a result of increased
sales commissions that are directly correlated with the sales growth. The increase in outside fees and services was primarily due to our use of a
temporary workforce to support our sales growth and demand in our distribution centers, increased professional services fees related to
operating as a public company and increased credit card and other bank fees. Increases in location and travel costs are due to increased
headcount and costs associated with supporting our sales growth. Increases in occupancy costs are due primarily to the distribution center we
acquired in the Vetpo acquisition and the relocation of our distribution centers in Nampa, Idaho and Denver, Colorado from owned properties
to leased properties.

Depreciation and Amortization. Depreciation and amortization expense increased 25.9% to $915 for the six-months ended March 31, 2006
from $727 for the six-months ended March 31, 2005. Depreciation expense increased as a result of the distribution center equipment upgrades
at our Nampa, Idaho and Denver, Colorado facilities in April 2005 and December 2005, respectively, and as a result of


                                                                           30
the facility we acquired in the purchase of Vetpo. In addition, amortization expense increased as a result of intangible assets acquired in the
purchase of Vetpo. We expect that depreciation and amortization expense related to leasehold improvements will increase as a result of our
new distribution center located in Orlando, Florida that is expected to open by June 2006.

Other Expenses. Other expenses decreased 75.5% to $824 for the six-months ended March 31, 2006 from $3,362 for the six-months ended
March 31, 2005. The decrease in other expenses was primarily due to a reduction in interest expense of $2,412 in the six-months ended
March 31, 2006 as compared to the same period in the prior year. Included in interest expense for the six-months ended March 31, 2005 is
accretion of dividends on the Series A preferred stock of $2,315. The Series A preferred stock was redeemed in August 2005.

Income Tax Expense. Our effective tax rate was 39.5% for the six-months ended March 31, 2006 and 56.6% for the six-months ended
March 31, 2005. The decrease in the effective rate in the quarter ended March 31, 2006 as compared to the same quarter in the prior year was
primarily a result of the elimination of the non-deductible accretion of dividends on the Series A preferred stock that was redeemed in
August 2005.

Fiscal 2005 Compared to Fiscal 2004

Total Revenues. Total revenues increased $102,373, or 26.0%, to $496,655 for the fiscal year ended September 30, 2005 from $394,282 for
the fiscal year ended September 30, 2004. This increase was attributable to an increase in product sales volumes of a wide variety of products
to both existing and new customers. Revenues attributable to new customers represented approximately 57% of the growth in total revenues in
the fiscal year ended September 30, 2005. Revenues attributable to existing customers represented approximately 43% of the growth in total
revenues during the fiscal year ended September 30, 2005. For the purpose of calculating growth rates of new and existing customer revenue,
we have defined a new customer as a customer that did not purchase product from MWI in the corresponding fiscal quarter of the prior year,
with the remaining customer base being considered an existing customer. Revenues from new customers for each fiscal quarter are summed to
arrive at the estimated fiscal year revenue for new customers. On January 3, 2005, we acquired substantially all the assets of Vetpo. Revenues
from Vetpo subsequent to the acquisition date are included in our calculation of new customers. From the acquisition date through
September 30, 2005, the field sales representatives who joined us from Vetpo produced sales of approximately $13,700. This acquisition has
enabled us to substantially expand our market presence in Michigan, Illinois, Indiana, Ohio and Wisconsin. Revenues improved in 2005 as
compared to the prior year as a result of the conversion to a “buy/sell” arrangement for an equine West Nile Virus vaccine that was a
commission-based agency relationship in the prior year, the addition of new cattle antibiotics and the addition of a leading non-steroidal
anti-inflammatory drug for dogs. We increased the number of field sales representatives to 134 at September 30, 2005 from 111 at
September 30, 2004, allowing us to target additional customers and to extend geographic reach, principally in the Northeast and Southeast
regions of the United States.

Gross Profit. Gross profit increased by $14,348, or 25.8%, to $69,946 for the fiscal year ended September 30, 2005 from $55,598 for the
fiscal year ended September 30, 2004. Vendor rebates contributed to the gross profit improvement by $2,699 for the year ended September 30,
2005 as compared to the prior year. Gross profit as a percentage of total revenues for the year ended September 30, 2005 was 14.1%, the same
as the prior year.

Selling, General and Administrative Expenses. SG&A expenses increased by $10,775, or 25.7%, to $52,647 for the fiscal year ended
September 30, 2005 from $41,872 for the fiscal year ended September 30, 2004. SG&A expenses as a percentage of total revenues for the year
ended September 30, 2005 remained consistent with that of the prior year at 10.6% of total revenues. During the fourth


                                                                           31
quarter ended September 30, 2005, we incurred a $2,000 charge related to the termination of a management services and consulting agreement.
This charge contributed to the increase in SG&A expense, both in dollars and as a percentage of total revenues. Partially offsetting this charge,
SG&A expenses for the year benefited from increased sales leverage. The dollar increase for the fiscal year ended September 30, 2005 was
also due to increased compensation costs, outside fees and services, location and travel costs, and occupancy costs. Compensation costs
increased due to the addition of 98 employees during the year. Compensation costs also increased as a result of increased sales commissions
that are directly correlated with our sales growth and annual performance wage increases. The increase in outside fees and services was
primarily due to increased credit card and other bank fees, increased use of a temporary workforce to support our sales growth in our
distribution center facilities and increased professional services fees related to our efforts to become a public company. Increases in location,
travel and occupancy costs were due to the increased number of employees and increased sales volume, the opening of a new facility in
Harrisburg, Pennsylvania in April 2004 and the facility we acquired in the Vetpo acquisition located in Holland, Michigan. Management fees
included in SG&A expenses were $2,456 for the fiscal year ended September 30, 2005, compared to $386 for the same period in the prior year
and are the result of a management and consulting services agreement between us, BRS and Agri Beef Co. that was terminated in August 2005.

Depreciation and Amortization. Depreciation and amortization expense increased 33.3%, or $382, to $1,528 for the fiscal year ended
September 30, 2005 from $1,146 for the fiscal year ended September 30, 2004. This increase was due primarily to amortization of intangible
assets acquired with the purchases of Vetpo and Memorial Pet Care. In addition, depreciation expense increased as a result of the new facilities
in Harrisburg, Pennsylvania; Holland, Michigan and Nampa, Idaho.

Other Income (Expense). Other expenses increased $340, or 5.9%, to $6,116 for the fiscal year ended September 30, 2005 from $5,776 for
the fiscal year ended September 30, 2004. The increase in other expenses was primarily due to an increase in interest expense of $417 to $6,515
for the fiscal year ended September 30, 2005 from $6,098 for the same period in the prior year. Included in interest expense is the accretion of
dividends on the Series A preferred stock of $4,055 and $4,239 for the fiscal year ended September 30, 2005 and for the fiscal year ended
September 30, 2004, respectively, that was redeemed in August 2005 with a portion of the proceeds from our initial public offering.

Income Tax Expense. Our effective income tax rate was 52.8% and 62.9% for the fiscal year ended September 30, 2005 and for the fiscal year
ended September 30, 2004, respectively. The decrease in the effective tax rate was primarily attributable to the lower nondeductible accretion
of dividends on the Series A preferred stock for the fiscal year ended September 30, 2005 due to the redemption of all of the Series A preferred
stock in August 2005 and due to actual state income tax expense being less than estimated due to the utilization of state tax credits.

Fiscal 2004 Compared to Fiscal 2003

Total Revenues. Total revenues increased $52,573, or 15.4%, to $394,282 for the fiscal year ended September 30, 2004 from $341,709 for
the fiscal year ended September 30, 2003. This increase was attributable to an increase in product sales volumes of a wide variety of our
products to both new and existing customers. Revenues attributable to new customers represented approximately 69% of the growth in total
revenues in the fiscal year ended September 30, 2004. Revenues attributable to existing customers represented approximately 31% of the
growth in total revenues during the fiscal year ended September 30, 2004. For the purpose of calculating growth rates of new and existing
customer revenue, we have defined a new customer as a customer that did not purchase product from MWI in the corresponding fiscal quarter
of the prior year, with the remaining customer base being considered an existing customer. Revenues from new customers for each fiscal
quarter are summed to arrive at the estimated fiscal year revenue for new customers. We increased the number of our field sales


                                                                          32
representatives to 111 at September 30, 2004 from 94 at September 30, 2003, allowing us to target additional customers and to extend our
geographic reach, principally in the Northeast and Southeast regions of the United States. The growth in total revenues and revenues
attributable to existing customers were negatively impacted by a transition in the selling arrangement of certain products by certain vendors
from a “buy/sell” to an agency relationship, under which only commissions are recorded as revenues. These vendor lines represented $3,800 of
total revenues, including product sales and commissions, for the fiscal year ended September 30, 2004 and $14,100 of total revenues, including
product sales and commissions, for the fiscal year ended September 30, 2003.

Gross Profit. Gross profit increased by $8,581, or 18.3%, to $55,598 for the fiscal year ended September 30, 2004 from $47,017 for the
fiscal year ended September 30, 2003. Gross profit as a percentage of total revenues was 14.1% for the fiscal year ended September 30, 2004,
compared to 13.8% in the prior year. Our gross profit margin benefited from an increase in vendor rebates of $3,062 as a result of attaining
certain growth goals and a decrease in freight expense as a percentage of total revenues, partially offset by a decreased margin due to changes
in product mix and to increased pricing pressure.

Selling, General and Administrative Expenses. SG&A expenses increased by $5,986, or 16.7%, to $41,872 for the fiscal year ended
September 30, 2004, from $35,886 for the fiscal year ended September 30, 2003. This increase was primarily due to the addition of 46
employees, including 17 field sales representatives, and new facilities in Harrisburg, Pennsylvania; Meridian, Idaho and Fife, Washington. We
relocated to a larger distribution center in Visalia, California in order to expand our capacity. The incremental expense from these facilities for
the fiscal year ended September 30, 2004 was $507 when compared to the prior year. SG&A expenses as a percentage of total revenues
increased slightly to 10.6% for the fiscal year ended September 30, 2004 compared to 10.5% in the prior year. Management fees included in
SG&A expenses were $386 for the fiscal year ended September 30, 2004 compared to $250 in the prior year.

Depreciation and Amortization. Depreciation and amortization expense increased $170, or 17.4%, to $1,146 for the fiscal year ended
September 30, 2004 from $976 for the fiscal year ended September 30, 2003. This increase was due primarily to capital expenditures for
delivery trucks used at our distribution center facilities to support our sales growth.

Other Income (Expense). Other expenses increased $3,066, or 113.1%, to $5,776 for the fiscal year ended September 30, 2004, from $2,710
for the fiscal year ended September 30, 2003. The increase in other expenses was primarily due to an increase in interest expense of $3,064 to
$6,098 in 2004, from $3,034 in the prior year. This increase was due principally to the accretion of the Series A redeemable preferred stock
dividends which was reflected as interest expense commencing with the adoption of a new accounting standard effective July 1, 2003.

Income Tax Expense. Our effective income tax rate was 62.9% and 41.9% for the fiscal year ended September 30, 2004 and for the fiscal
year ended September 30, 2003, respectively. The increase in the effective tax rate was primarily attributable to the nondeductible accretion of
dividends on the Series A preferred stock, beginning on July 1, 2003.


                                                                            33
Seasonality in Operating Results

Our quarterly sales and operating results have varied significantly in the past, and will likely continue to do so in the future. Historically, our
total revenues have typically been higher during the spring and fall months due to increased sales of production animal products. Product use
cycles for production animal products are directly related to medical procedures performed by veterinarians on production animals during the
spring and fall months. These buying patterns can also be affected by vendors’ and distributors’ marketing programs launched during the
summer months, particularly in June, which can cause veterinarians to purchase production animal health products earlier than those products
are needed. This kind of early purchasing may reduce our sales in the months these purchases would have otherwise been made. See “Risk
Factors — Our quarterly operating results may fluctuate significantly.” Additionally, while we accrue rebates as they are earned, our rebates
have historically been highest during the quarter ended December 31, since some of our vendors’ rebate programs were designed to include
targets to be achieved near the end of the calendar year. During calendar year 2006, certain of our vendors modified their rebate programs with
us. These rebate program modifications changed the revenue growth targets from annual-weighted calendar year targets to either quarterly or
trimester growth targets. These modifications will result in rebates previously expected to be earned and recognized in our first fiscal quarter
2007 ending on December 31 (or the fourth calendar quarter) to be recognized earlier in our fiscal year 2006.

Our companion animal products tend to have a different product use cycle that minimally overlaps with that of production animal products. In
the companion animal market, sales of flea, tick and mosquito products are highest during the spring and summer months. The differing
product use cycles of companion animal products partially offsets the seasonality we typically experience due to our sales of production animal
products.


                                                                           34
For the reasons and factors discussed above our quarterly operating results may fluctuate significantly. Accordingly, results for any one quarter
are not necessarily indicative of results to be expected for any other quarter or for any year and our sales for any particular future period may
decrease. In the future, operating results may fall below the expectations of securities analysts and investors. If this occurs, the price of our
stock would likely decrease.

                                                                                      For the three-months ended
                                  Mar. 31,           Jun. 30,          Sept. 30,       Dec. 31,      Mar. 31,     Jun. 30,                Sept. 30,          Dec. 31,      Mar. 31,
                                   2004               2004               2004            2004         2005          2005                    2005              2005          2006
                                                                                ( in thousands, except per share data)
                                                                                               Unaudited
     Revenues:
       Product sales              $ 88,945       $      99,674     $       96,718     $ 101,260       $ 108,888       $ 130,377       $      122,747     $ 127,048         $ 133,255
       Product sales to related
          party                        4,122             5,236              6,045           6,805           6,142           6,433             9,093             9,355            8,001
       Commissions                     1,096             1,276              1,116             929           1,380           1,177             1,424             1,413            2,093
          Total revenues              94,163           106,186            103,879         108,994         116,410         137,987           133,264           137,816          143,349
     Cost of product sales            80,531            91,981             89,843          92,370          99,938         119,955           114,446           115,064          123,421
     Gross profit                     13,632            14,205             14,036          16,624          16,472          18,032            18,818            22,752           19,928
     Selling, general and
       administrative
       expenses                       10,440            10,575             10,986          11,016          12,803          13,217             15,611           14,553           15,159
     Depreciation and
       amortization                      272               306                317             340             387             393                408               442             473
     Operating income                  2,920             3,324              2,733           5,268           3,282           4,422              2,799             7,757           4,296
     Other income (expense):
       Interest expense               (1,504 )          (1,485 )           (1,679 )        (1,769 )        (1,776 )        (1,849 )           (1,120 )            (555 )          (578 )
       Earnings of equity
          method investees              19                  24                 29              32              27              30                 42                45              37
       Other                            47                  49                 57              67              57              60                 83                90             137
          Total other expense       (1,438 )            (1,412 )           (1,593 )        (1,670 )        (1,692 )        (1,759 )             (995 )            (420 )          (404 )
     Income before taxes             1,482               1,912              1,140           3,598           1,590           2,663              1,804             7,337           3,892
     Income tax expense               (940 )            (1,195 )             (716 )        (1,942 )          (995 )        (1,256 )             (905 )          (2,898 )        (1,537 )
     Net income                   $    542       $         717 $              424 $         1,656 $           595 $         1,407 $              899 $           4,439 $         2,355

     Earnings per common
        share:
       Basic                      $     0.11     $        0.14     $         0.08     $      0.33     $      0.12     $      0.28     $         0.10     $        0.42     $      0.22
       Dilutive                   $     0.09     $        0.12     $         0.07     $      0.28     $      0.10     $      0.24     $         0.10     $        0.41     $      0.22



Liquidity and Capital Resources

Our principal sources of liquidity are cash flows generated from operations and borrowings on our revolving credit facility under the amended
credit agreement. We use capital primarily to fund day-to-day operations and to maintain sufficient inventory levels in order to promptly fulfill
customer orders and to expand our operations and sales growth. We believe our capital resources will be sufficient to meet our anticipated cash
needs for at least the next twelve months.

On August 3, 2005, we completed our initial public offering in which we sold an aggregate of 4,983,334 shares (including the exercise of the
underwriters’ over-allotment option) of our common stock at a price of $17 per share. We received net proceeds of $77,159 after deducting the
underwriting discounts and offering expenses. We used the net proceeds to redeem all of our Series A preferred stock for approximately
$39,789 and to repay approximately $37,370 of borrowings outstanding on our revolving credit facility under our amended credit agreement.

Operating Expense. For the six-months ended March 31, 2006, cash provided by operations was $2,003, and was primarily attributable to
net income of $6,794 and a reduction in inventories of $4,959


                                                                                             35
partially offset by an increase in accounts receivable and a decrease in accounts payable. The increase in net income is a result of the factors
discussed above in “Results of Operations”. The decrease in inventories from September 30, 2005 to March 31, 2006 was a result of higher
inventory levels at September 30, 2005 due to seasonal purchases related to production animals and due to purchases of products in advance of
price increases. The increase in accounts receivable for the six-months ended March 31, 2006 was a result of the increased revenue growth. The
decrease in accounts payable for the six-months ended March 31, 2006 was primarily due to timing of inventory purchases and associated
payments. For the six-months ended March 31, 2005, net cash provided by operating activities was $10,671, and was primarily attributable to
an increase in accounts payable of $5,370 and net income. The increase in accounts payable was the result of timing of inventory purchases.

For our fiscal year ended September 30, 2005 cash used in operations was $5,611 and was primarily attributable to increases in inventories of
$17,334 and accounts receivable of $15,276. This amount was partially offset by an increase in accounts payable of $15,837, non-cash
accretion of the Series A preferred stock dividends of $4,055 (included in interest expense) and net income of $4,557. The increased levels of
inventory and accounts payable resulted from moving certain products we sell from a commission-based agency arrangement to a “buy/sell”
arrangement, increased sales growth requiring higher levels of inventory and new product offerings. Increased accounts receivables are directly
related to the increase in sales. Additionally, we provided extended payment terms to production animal veterinarians in June and July of 2005
in response to market conditions.

For our fiscal year ended September 30, 2004 net cash used by operating activities was $13,889 and was primarily attributable to increases of
$12,668 in inventories and $10,071 in accounts receivable. The increase in inventories was primarily related to supporting increased sales
growth and adding a distribution center in Harrisburg, Pennsylvania. During this time period, we offered extended payment terms to production
animal veterinarians in response to market conditions and experienced increased sales that led to the increase in accounts receivable balances.
The increase in inventories and accounts receivable were partially offset by non-cash accretion of the Series A preferred stock dividends of
$4,239 (included in interest expense) and net income of $2,524.

For our fiscal year ended September 30, 2003, net cash provided by operating activities was $8,781 and was primarily attributable to net
income of $4,329, a decrease of $1,555 in inventories, non-cash accretion of our Series A preferred stock dividends of $999 and a positive net
effect of $923 of an $8,536 increase in accounts receivable offset by a $9,459 increase in accounts payable. The decrease in inventories related
primarily to two product lines moving from a “buy/sell” to an agency arrangement. The increase in both accounts receivable and accounts
payable are a reflection of sales growth and they offset with a minimal effect on operating activities.

Investing Activities. For the six-months ended March 31, 2006, net cash used in investing activities was $2,191 compared to net cash used by
investing activities of $6,209 for the six-months ended March 31, 2005. Net cash used by investing activities for the six-months ended
March 31, 2006 was primarily due to capital expenditures of $2,238 related to relocating our existing distribution center to a new larger
distribution center in Denver, Colorado and due to the purchase of equipment for a new distribution center in Orlando, Florida. During the
three-months ended March 31, 2006 we completed our sale of a distribution center previously operated in Denver, Colorado for $1,455. Net
cash used in investing activities for the six-months ended March 31, 2005 was $6,209, primarily attributable to the acquisitions of Memorial
Pet Care, Inc. and Vetpo Distributors, Inc. and capital expenditures.

For our fiscal year ended September 30, 2005, net cash used in investing activities was $6,529 and was primarily attributable to the acquisition
of certain assets of Vetpo and Memorial Pet Care, Inc. In addition, in April 2005, we relocated from an existing distribution center facility to a
larger distribution center facility in Nampa, Idaho. The capital expenditures for the equipment for this facility were


                                                                           36
approximately $657. We also began the relocation of our Denver, Colorado distribution center to a new, larger, 58,737 square-foot facility that
was opened in December 2005.

Net cash used by investing activities was $1,251 for our fiscal year ended September 30, 2004 and was primarily attributable to investments in
equipment, including the purchase of office, distribution center and computer equipment. In November 2003, we relocated from an existing
distribution center facility to a larger distribution center facility in Visalia, California. The capital expenditure for the equipment for this facility
was approximately $507. In December 2003, we signed a new distribution center lease for a Harrisburg, Pennsylvania location. The capital
expenditure for the equipment for this facility was approximately $696. We use these facilities to ship products to our customers in their
respective areas of the United States. Also in 2004, we upgraded our enterprise information system at a cost of approximately $283. The
implementation was effective July 2004.

Net cash used by investing activities was $1,307 in 2003 and was primarily attributable to investments in equipment, including the purchase of
office, distribution center and computer equipment.

Financing Activities. For the six-months ended March 31, 2006, net cash provided by financing activities was $191, and was primarily
attributable to proceeds from the exercise of stock options and the related tax benefits. For the six-months ended March 31, 2005, net cash used
in financing activities was $4,459, which was a result of payments on our revolving credit facility. Our revolving credit facility is used to
finance our working capital requirements and fluctuates based on timing of payables and collection of receivables.

For our fiscal year ended September 30, 2005 net cash provided by financing activities was $12,143 and was primarily due to the net proceeds
of $77,159 received from our initial public offering in August 2005. These proceeds were used to redeem all of our Series A preferred stock for
$39,789 and to repay approximately $37,370 of borrowings outstanding on our revolving credit facility under our amended credit agreement.

For the fiscal year ended September 30, 2004 net cash provided by financing activities was $15,132 and for the fiscal year ended September 30,
2003 net cash used in financing activities was $7,474. Changes in cash flows from financing activities for the fiscal year ended September 30,
2004 and the fiscal year ended September 30, 2003 were primarily due to borrowings from and payments under our revolving credit facility,
which is used to finance our working capital requirements and fluctuates based on timing of payables and collection of receivables.

Capital Resources. We have a line-of-credit agreement with two lenders for a credit facility that allows for borrowings up to $70,000. The
line-of-credit is secured by a security interest in substantially all of our assets and terminates on June 18, 2007. Interest is due monthly at the
following rates: 1) the London Interbank Offered Rate (“LIBOR”) plus a margin (6.3% at March 31, 2006); or 2) the prime rate (7.75% at
March 31, 2006). The lenders also receive an unused line fee and letter of credit fee equal to 0.375% of the unused amount of the revolving
credit facility. Our outstanding balance on this facility at March 31, 2006 was $24,654 of which $20,000 carried an interest rate at LIBOR and
$4,654 carried an interest rate at the prime rate. The line-of-credit contains certain restrictive financial covenants as well as restrictions on
dividend payments and future debt borrowings. We intend to use the proceeds from this offering to pay down our revolving credit facility
which will reduce our interest expense in future periods.

From time to time we issue letters of credit to act as guarantee of payment to specified third parties. At March 31, 2006, we had six letters of
credit totaling $600 and at September 30, 2005 we had three letters of credit totaling $300. There were no outstanding borrowings on these
letters of credit at March 31, 2006 or September 30, 2005.


                                                                              37
In January 2005, we issued a non-negotiable promissory note in the aggregate principal amount of $487 in partial consideration for the
purchase of substantially all the assets of Vetpo. The note bears interest at the prime rate, payable quarterly. The principal of the note is payable
in five equal annual installments, beginning on January 1, 2006. At March 31, 2006 we owed $389 on this note payable.

We believe our capital resources will be sufficient to meet our anticipated cash needs for at least the next twelve months.

Contractual Obligations

Contractual Obligations

Our contractual obligations at September 30, 2005 mature as follows:

                                                                                            Payments Due by Period
                                             Total                 1 Year or less              2-3 Years      4-5 Years                            More than 5 Years
Line-of-credit to banks (1)                 $ 24,690                $         —                $ 24,690       $      —                               $          —
Operating lease
   commitments (2)                                6,903                       1,494                     2,630                 1,893                                 886
Long-term debt obligations
   (including current
   portion)                                         487                           97                      195                   195                                   —
Interest on long-term debt
   and line-of-credit (3)                         2,985                       1,731                     1,243                     11                                  —
Total contractual
   obligations                              $ 35,065                $         3,322               $    28,758           $     2,099                    $            886


(1)      For the purposes of the table above the line-of-credit is assumed to be paid at the credit facility’s termination date of June 18, 2007. For financial statement purposes,
         the line-of-credit is classified as a current liability. We intend to use the proceeds from this offering to pay down our revolving credit facility which will reduce our
         interest expense in future periods.

(2)      In the six-months ended March 31, 2006 we leased an approximate 30,000 square foot distribution center located in Orlando, Florida with an average annual lease of
         $183 per year and expiring in 2013. In May 2006 we entered into a lease agreement for an approximate 25,000 square foot distribution center located in Clear Lake,
         Wisconsin with an average annual lease expense of $86 per year and expiring in 2013. In May 2006 we leased an additional 3,000 square feet for our corporate offices
         located in Meridian, Idaho for an additional $32 per year expiring in 2011.

(3)      Future interest payments are calculated based on the assumption that all debt is outstanding until maturity. For debt instruments with variable interest rates and unused
         commitment fees, interest has been calculated for all future periods using the rates in effect at September 30, 2005.

Guarantees

We provide guarantees, indemnifications and assurances to others in the ordinary course of our business. We have evaluated our agreements
that contain guarantees and indemnification clauses in accordance with the guidance of Financial Accounting Standards Board (“FASB”)
Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others .

We enter into a wide range of indemnification arrangements in the ordinary course of business. These include tort indemnities, tax indemnities,
indemnities against third party claims arising out of arrangements to provide services to us, indemnities in merger and acquisition agreements
and indemnities in agreements related to the sale of our securities. Also, our governance documents and substantially all


                                                                                            38
of our subsidiaries provide for the indemnification of individuals made party to any suit or proceeding by reason of the fact that the individual
was acting as an officer, director or agent of the relevant company or as a fiduciary of a company-sponsored welfare benefit plan. We also
provide guarantees and indemnifications for the benefit of our wholly-owned subsidiaries for the satisfaction of performance obligations,
including certain lease obligations. It is difficult to quantify the maximum potential liability under these indemnification arrangements;
however, at March 31, 2006 we were not aware of any material liabilities arising from these indemnification arrangements.

Inflation

Most of our operating expenses are inflation-sensitive, with inflation generally producing increased costs of operations. During the past three
years, the most significant effects of inflation have been on employee wages, costs of products and fuel-intensive costs including freight,
packing supplies and travel. We managed the effects of inflation by controlling increases in compensation expense, renegotiating freight carrier
contracts and utilizing a central source for warehouse shipping supplies.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to sales returns,
allowance for doubtful accounts, customer incentives, vendor rebates, inventories, goodwill and intangible assets, income taxes, impairment of
long-lived assets, depreciation and amortization, employee benefits, unearned income and contingencies. We base our estimates on historical
experience and on various other assumptions and factors that are believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We, based on
our ongoing review, will make adjustments to our judgments and estimates where facts and circumstances dictate. Historically, actual results
have not significantly deviated from those determined using the estimates described above.

We believe the following critical accounting policies are important to understand our financial condition and results of operations and require
management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that
are inherently uncertain.

Revenue Recognition

We sell products that we source from vendors to our customers through either a “buy/sell” transaction or an agency relationship with our
vendors. In a “buy/sell” transaction, we purchase and take inventory of products from the vendor. When a customer places an order with us, we
pick, pack, ship and invoice the customer for the order. We recognize revenue from “buy/sell” transactions as product sales when the product is
delivered to the customer. We accept product returns from our customers. We estimate sales returns based on historical experience, and returns
are recognized as a reduction of product sales. Product returns have not been significant to our financial statements. In an agency relationship,
we do not purchase and take inventory of products from our vendors. We receive an order from a customer, transmit the order to the vendor,
who picks, packs and ships the order to the customer. In some cases, the vendor invoices and collects payment from the customer, while in
other cases we invoice and collect payment from the customer on behalf of the vendor. We receive a commission payment for soliciting the
order from the customer and for providing other customer service activities. Commissions are recognized when the services upon which the
commissions are based are complete.


                                                                           39
Vendor Rebates

Vendor rebates are recorded based on the terms of the contracts with each vendor and in accordance with the provisions of Emerging Issues
Task Force (EITF) Issue No. 02-16, Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor. We
receive quarterly, trimester and annual performance-based rebates from third-party vendors based upon attainment of certain sales and/or
purchase goals. Sales rebates are classified in our accompanying consolidated statements of income as a reduction to cost of product sales at the
time the sales performance measures are achieved. Purchase rebates are measured against inventory purchases from the vendors and are a
reduction of inventory until the product is sold. When the inventory is sold, purchase rebates are recognized as a reduction to cost of product
sales.

Historically, actual results have not significantly deviated from those determined using the estimates described above. We expect that our
estimates in the future will continue to be reasonable as our rebates are based on specific vendor program goals and are principally recorded
upon achievement of sales performance measures.

Customer Incentives

Customer incentives are accrued based on the terms of the contracts with each customer and in accordance with the provisions of EITF Issue
No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). These incentive
programs provide that the customer receives an incentive based on their product purchases or attainment of performance goals. Incentives are
estimated based on the specific terms in each agreement, historical experience and product growth rates.

Goodwill

We assess the potential impairment of goodwill annually and on an interim basis whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. Factors that we consider important and may trigger an interim impairment review, include:

                Significant underperformance relative to expected historical or projected future operating results;

                Significant changes in the manner of our use of acquired assets or the strategy of our overall business; and

                Significant negative industry or economic trends.

If we determine through the impairment review process that goodwill is impaired, an impairment charge is recognized in our consolidated
statement of income.

Goodwill was tested for impairment in our fourth quarter of 2005 and we determined that the recorded amount was not impaired. The fair value
calculations used for these tests require us to make assumptions about items that are inherently uncertain. Assumptions related to future market
demand, market prices and product costs could vary from actual results, and the impact of such variations could be material. Factors that could
affect the assumptions include changes in economic conditions, changes in government regulations, success in marketing products and
competitive conditions in our industry. The factors that most significantly affect the fair value calculation are market multiples and estimates of
future cash


                                                                           40
flows. Fair value was determined by management with the assistance of an independent third-party appraiser who primarily used the discounted
cash flow method and the guideline company method.

Stock Options

Effective October 1, 2005, we adopted the provisions of Statement of Accounting Standards (“SFAS”) No. 123 (Revised), Share-Based
Payment (“SFAS 123-R”) for our share-based compensation plans using the modified prospective method. We previously accounted for these
plans under the recognition and measurement principals of Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued
to Employees and related interpretations (collectively “APB 25”) and disclosure requirements established by SFAS No. 123, Accounting for
Stock-based Compensation, as amended by SFAS No. 148, Accounting for Stock Based Compensation — Transition and Disclosure ( “SFAS
148” ). Under APB 25, no compensation expense was recorded in earnings for our stock-based awards granted under our stock-based award
plans. The pro forma effects on net income and earnings per share for stock-based awards were instead disclosed in a footnote to the financial
statements. Under SFAS 123-R, all share-based compensation is measured at the grant date, based on the fair value of the award, and is
recognized as an expense in earnings over the requisite service period. The fair value of a stock award is determined using a option valuation
model such as the Black-Scholes-Merton Option Pricing Model or a lattice model such as the Binomial Stock Option Pricing Model. These fair
value calculations require us to make assumptions about items that are inherently uncertain. Assumptions related to future expected volatility,
life, dividends, risk-free interest rates, forfeitures and other assumptions could vary from actual results, and the impact of such variations could
be material.

Under the modified prospective method, compensation expense includes the expense for all share-based awards granted prior to, but not yet
vested as of October 1, 2005 excluding those options initially valued using the minimum value method. At October 1, 2005, all of our options
to purchase common stock were either vested and exercisable or were initially valued using the minimum value method. Therefore, we have
recognized no compensation expense for stock-based awards in the six-months ended March 31, 2006. For the six-months ended March 31,
2005, compensation expense that would have been recorded had we adopted the fair value method (all of which would have been determined
using the minimum value method) was not significant. For the fiscal year ended September 30, 2005, compensation expense that would have
been recorded had we adopted the fair value method would have been approximately $601. For the fiscal year 2004 and 2003, compensation
expense that would have been recorded had we adopted the fair value method (all of which would have been determined using the minimum
value method) was not significant.

Recently Issued and New Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS 151, Inventory Costs, an Amendment of ARB No. 43,
Chapter 4 (“SFAS 151”). SFAS 151 clarifies that inventory costs that are “abnormal” are required to be charged to expense as incurred as
opposed to being capitalized into inventory as a product cost. SFAS 151 provides examples of “abnormal” costs that include costs of idle
facilities, excess freight and handling costs, and wasted material (spoilage). SFAS 151 was effective for us beginning on October 1, 2005 and
our adoption did not have a material effect on our consolidated financial statements.

In December 2004, the FASB issued SFAS 123-R. SFAS 123-R replaces SFAS123, as amended by SFAS 148, and supersedes APB 25. The
adoption of SFAS 123 R required us to record non-cash expense for our stock-based award compensation plans using the fair value method.
SFAS 123-R was effective for us on October 1, 2005 and the adoption of SFAS 123-R did not have a material effect on our consolidated
financial statements.


                                                                            41
In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29 (“SFAS 153”),
which eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges
of nonmonetary assets that do not have commercial substance. We adopted SFAS 153 as of October 1, 2005 and the adoption did not have a
material effect on our consolidated financial statements.

In May 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections (“SFAS 154”). SFAS 154 replaces FASB Statement
No. 3, Reporting Accounting Changes in Interim Financial Statements , and ABP No. 20, Accounting Changes . SFAS 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005 and will be effective for us for our fiscal
year beginning October 1, 2006. The adoption of SFAS 154 is not expected to have a material effect on our consolidated financial statements.

In September 2005, the Emerging Issues Task Force issued EITF No. 04-13, Accounting for Purchases and Sales of Inventory with the Same
Counterparty (“EITF 04-13”). EITF 04-13 requires that purchases and sales of inventory with the same counterparty be accounted for as a
nonmonetary transaction within the scope of APB No. 29, Accounting for Nonmonetary Transactions . EITF 04-13 is effective for new
arrangements entered into, or modifications or renewals of existing arrangements, beginning in the first interim or annual reporting period
beginning after March 15, 2006. The adoption of EITF 04-13 is not expected to have a material effect on our consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks primarily from changes in United States interest rates. We manage this risk by, pursuant to the terms of our
amended credit agreement, converting the interest rate payable on the majority of the outstanding loan balance on our revolving credit facility
into a lower LIBOR interest rate. We do not engage in financial transactions for trading or speculative purposes.

The interest payable on the revolving credit facility under the amended credit agreement is based on variable interest rates and is therefore
affected by changes in market interest rates. If the weighted average interest rate on the variable rate indebtedness rose 66 basis points (a 10.0%
change from the calculated weighted average interest rate as of March 31, 2006), assuming no change in the outstanding balance on the
revolving credit facility under the amended credit agreement ($24,654 as of March 31, 2006), the annualized income before taxes and cash
flows from operating activities would decline by approximately $162. If the weighted average interest rate on the variable rate indebtedness
decreased 66 basis points (a 10.0% change from the calculated weighted average interest rate as of March 31, 2006), assuming no change in the
outstanding balance on the revolving credit facility under the amended credit agreement, the annualized income before taxes and cash flows
from operating activities would increase by approximately $162.

Credit Agreement

On June 18, 2002, we entered into a credit agreement with two lenders, Bank of America, N.A. and Fleet Capital Corporation, which was later
replaced by General Electric Capital Corporation, for a $70,000 credit facility. The credit agreement is secured by a security interest in
substantially all of our assets, including the stock of our subsidiaries, and terminates on June 18, 2007. The credit agreement contains certain
restrictive financial covenants as well as restrictions on dividend payments and future debt borrowings. Interest is due monthly at the following
rates: LIBOR plus a margin on the portion converted to LIBOR in accordance with our amended credit agreement (6.3% at March 31, 2006), or
the prime rate (7.75% at March 31, 2006). During 2004, we amended the credit agreement and negotiated a reduction in the margin over
LIBOR from 2.0% to 1.75%. The lenders also receive an unused line fee and letter of credit fee equal to 0.375% of the unused amount of the
revolving credit facility. As of


                                                                           42
March 31, 2006, the effective interest rate for all borrowings under the revolving credit facility was 6.6% per annum. The outstanding balance
on this facility at March 31, 2006 was $24,654 of which $20,000 carried an interest rate at LIBOR and $4,654 carried an interest rate at the
prime rate. Under the amended credit agreement, up to $10,000 is available for letters of credit. During 2004, we established two letters of
credit totaling $3,100. During 2005, the $3,000 letter of credit expired and was not renewed and two additional letters of credit were issued for
$100 each, for a total of $300. At March 31, 2006, we had a total of six letters of credit totaling $600. There were no outstanding borrowings on
these letters of credit at September 30, 2005 or March 31, 2006. As part of the credit agreement, we were required to maintain an interest rate
swap on a minimum notional amount of $12,000 of borrowings under the revolving credit facility. Under the most recent swap agreement that
expired on July 7, 2005, we received interest at a floating rate based on LIBOR and paid interest at a fixed rate of 2.49%. This had the effect of
reducing our exposure to fluctuations in variable interest rates to which we would otherwise be subject. We have received a waiver for our
obligation to maintain an interest rate swap from the lenders effective as of July 7, 2005. For our fiscal year ended September 30, 2005, 2004
and 2003, the impact of this interest swap was interest expense of $1, $37 and $127, respectively.

In addition, in December 2003, we amended the credit agreement to include borrowings of up to $2,500 on a capital loan for capital equipment
purchases only. Interest was due monthly at the following rates: LIBOR plus a margin on the portion converted to LIBOR in accordance with
the amended credit agreement, or the prime rate plus a margin. In August 2005, we terminated the capital loan and paid off the outstanding
balance.

Promissory Note

In January 2005, we issued a non-negotiable promissory note in the aggregate principal amount of $487 in partial consideration for the
purchase of substantially all the assets of Vetpo. The note bears interest at the prime rate, payable quarterly. The principal of the note is payable
in five equal annual installments, beginning on January 1, 2006. At March 31, 2006 we owed $389 on this note payable.

Off Balance Sheet Arrangements

At March 31, 2006 we had no significant investments that were accounted for under the equity method in accordance with accounting
principles generally accepted in the United States except for Feeders Advantage. Feeders Advantage has no liabilities associated with them that
were guaranteed by or that would be considered material to us. Accordingly, we do not have any off balance sheet arrangements with
unconsolidated entities.


                                                                            43
                                                                   BUSINESS

General

We are a leading distributor of animal health products to veterinarians across the United States. We distribute more than 10,000 products
sourced from over 400 vendors to more than 15,000 veterinary practices nationwide from ten strategically located distribution centers. Products
we sell include pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, supplies, veterinary pet food and nutritional products.
We market these products to veterinarians in both the companion animal and production animal markets. As of March 31, 2006, we had a sales
force of 237 people covering the United States. We also offer our customers a variety of value-added services, including on-line ordering,
pharmacy fulfillment, inventory management, equipment procurement consultation and special order fulfillment, which we believe closely
integrates us with our customers’ day-to-day operations and provides them with meaningful incentives to continue ordering from us.

Historically, approximately two-thirds of our total revenues have been generated from sales of companion animal products and one-third from
production animal products. For our fiscal year ended September 30, 2005, our total revenues were $496.7 million and our operating income
was $15.8 million. For the six-months ended March 31, 2006, our total revenues were $281.2 million and our operating income was $12.1
million.

Industry Overview

According to the Animal Health Institute, animal health product sales in the United States for 2004 totaled nearly $5 billion, an increase of 5%
compared to 2003. The market for animal health products in the United States is split between products sold for companion and production
animals. Companion animals include dogs, cats, other pets and horses, while production animals include cattle and other food-producing
animals. The Animal Health Institute estimates that the market for animal health products in the United States for 2004 was approximately 58%
companion animal and 42% production animal.

We believe the companion animal health products market is growing due to the increasing number of households with companion animals, an
aging pet population, increased expenditures on animal health and preventative care, advancements in pharmaceuticals and diagnostic testing
and extensive marketing programs sponsored by companion animal nutrition and pharmaceutical companies. We believe that product sales in
the production animal health products market are largely driven by continued spending on animal health products to improve productivity,
weight gain and disease prevention, as well as a growing focus on food safety. We believe that these growth factors are mitigated by the
downward influence of generic drugs on pricing.

Veterinarians are one of the primary purchasers of animal health products, particularly in the companion animal market. As of December 31,
2005, according to AVMA, there were more than 54,000 veterinarians in private practice in more than 27,000 veterinary practices nationwide.
Based on data provided by AVMA, we estimate that these veterinary practices purchase an average of $140,000 of animal health products
annually, including food, the majority of which is ordered through distributors. We believe veterinary practices typically place at least one
order per week to avoid storing and managing large volumes of supplies.

We believe that distributors play a vital role for veterinary practices by providing access to a broad selection of products through a single
channel and helping them efficiently manage their inventory levels. Distributors also offer product vendors substantial value by providing
cost-effective access to a highly fragmented and geographically diverse customer base.


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Competitive Strengths

We believe that our strengths include:

                Leading Distributor to Veterinarians. Based upon our total revenues for our fiscal year ended September 30, 2005, we are a
             leading animal health products distributor to veterinarians in the United States. While most of our products are available from
             several sources and our customers typically have relationships with several distributors, we have achieved this position primarily
             through internal growth and currently serve more than 15,000 of the approximately 27,000 veterinary practices nationwide. We
             believe that our broad product offering, competitive pricing, superior customer service, rapid product fulfillment and value-added
             services provide meaningful incentives for our customers to continue ordering from us.

                Leading Sales and Marketing Franchise. Our 237 sales representatives educate customers on new veterinary products, assist
             in product selection and purchasing, and offer inventory management solutions. As of March 31, 2006, we had a sales force of
             142 field sales representatives and 95 telesales representatives covering the United States. We also publish detailed product
             catalogs and monthly magazines, which are often utilized by our customers as reference tools. We also publish detailed product
             catalogs and monthly magazines, which are often utilized by our customers as reference tools. While salespeople and printed
             materials are vital to our marketing strategy, we also provide on-line ordering, valuable business information and value-added
             services through our Internet site, www.mwivet.com . For our fiscal year ended September 30, 2005, approximately 21% of our
             product sales were generated through orders placed over the Internet. For the six-months ended March 31, 2006, approximately
             23% of our product sales were generated through orders placed over the Internet.

                Strong, Established Relationships with Veterinarians and Vendors. Our ability to serve as a single source for most of our
             customers’ animal health product needs has enabled us to develop strong and long-term customer relationships. Approximately
             65% of our product sales for the twelve-months ended March 31, 2006 were from customer accounts that were opened prior to
             June 2001 and approximately 79% of our product sales for the twelve-months ended March 31, 2006 were from customer
             accounts that were opened prior to June 2003. Independent veterinary practices have historically accounted for more than 80% of
             our product sales. In addition, for more than ten years we have maintained distribution arrangements with Banfield, the nation’s
             largest private veterinary practice, and with a non-controlled affiliate, Feeders’ Advantage, a related party and a buying group
             composed of several of the largest cattle feeders in the United States. Since we do not manufacture any of the products we sell, we
             are dependent on our vendors for the supply of our products. While our vendors often have relationships with multiple
             distributors, many of our key vendors including Fort Dodge, Schering-Plough and Vedco have been working with us for over ten
             years, while other key vendors including IDEXX Laboratories, Merial and Pfizer have more recently expanded their relationships
             with us. We believe our market position makes us an attractive partner for leading product vendors, since we provide
             cost-effective access to a significant portion of the highly fragmented and geographically diverse veterinary market.

                Recurring Revenue Product Base. Over 95% of our product sales for our fiscal years ended September 30, 2005, 2004 and
             2003 were from consumable medicines and supplies commonly required by veterinarians in their practice. Historically, this aspect
             of our business has resulted in a recurring stream of revenues.


                                                                         45
                Sophisticated Technology and Information Systems. In 2004, we successfully completed a comprehensive upgrade of our
             enterprise information system, the central hub for all of our business processes. This system supports order processing, inventory
             control, invoicing, shipping, sales analysis and reporting, supply chain management and financial accounting. We believe that this
             system could support more than a doubling of our revenues with minimal incremental investment.

                Experienced Management Team. We have a strong and experienced senior management team with substantial animal health
             industry expertise. The members of the our senior management team have been with us for an average of over ten years, and each
             member has demonstrated a commitment and capability to deliver growth in revenues and profitability.

Business Strategy

Our mission is to strengthen our position as a leading national animal health products distributor while continuing to efficiently deliver
substantial value and innovation to our customers, increase revenues and improve profitability. Our strategy to achieve our mission is outlined
below.

         Increase Sales to Existing Customers. We believe that veterinary practices typically purchase animal health products from multiple
         distributors. For our fiscal year ended September 30, 2005, the average annual product sales per veterinary practice served was
         approximately $28,000. We intend to increase our share of these purchases by utilizing our proprietary customer database to focus our
         marketing efforts, expanding our sales force, selectively adding products to our portfolio and increasing and expanding the
         value-added services we provide to our customers. By increasing the dollar value of purchases made by each customer as well as their
         average order size, we intend to increase our profitability. Competition for hiring sales representatives who have existing customer
         relationships is intense and we focus on retaining our valued staff who have demonstrated the skills needed to successfully market our
         products and services. If we fail to hire or retain a sufficient number of qualified professionals, it could adversely impact our business.

         Expand Business Assistance Services for Veterinarians. We intend to enhance our customer relationships by expanding our
         business assistance services for veterinarians. These value-added services include among others our e-commerce platform, Sweep™
         in-clinic inventory management systems, pharmacy fulfillment program, equipment procurement consultation and pet cremation
         service offerings. In addition, we recently began the process of upgrading our Internet site, www.mwivet.com, in order to significantly
         enhance the e-commerce functionality available to our customers.

         Increase the Total Number of Customers. We believe we provide products and services to more than 50% of all domestic veterinary
         practices. We intend to raise this percentage by increasing the number and productivity of our sales representatives, selectively
         acquiring competitors and adding distribution centers. We believe the greatest opportunities to add new customers are in the
         Northeastern, Midwestern and Southeastern regions of the United States, areas where we do not hold the leading market position. We
         believe it is important to increase the total number of customers served in order to attain the growth goals that are a feature of many of
         our vendors’ rebate programs. Changes to any vendor rebate program or our failure to achieve these growth goals may have a material
         effect on our gross profit and operating results in any given quarter or year.

         Continuously Seek to Improve Operations. We continuously evaluate opportunities to increase sales, lower costs and realize
         operating efficiencies. Current initiatives include investments in our databases and distribution center management systems. We also
         plan to pursue alternative


                                                                            46
        product sourcing strategies and have recently implemented a private label program on selected products to reduce our procurement
        costs and increase our profitability, while maintaining strong relationships with key vendors.

        Make Selective Acquisitions. The U.S. market for animal health products distribution is highly fragmented, with numerous national,
        regional and local distributors. Many of these companies are small, privately-held businesses, some of which may represent attractive
        acquisition candidates. In fiscal year 2005, we acquired and integrated Memorial Pet Care, Inc. and Vetpo Distributors, Inc. into our
        operations. On May 8, 2006, we acquired substantially all of the assets of Northland and we are in the process of integrating their
        business. We intend to continue pursuing acquisitions that are consistent with our mission of enhancing value to our customers,
        increasing revenues and improving profitability, while strengthening our competitive position. Additionally, we may evaluate
        selective acquisitions of niche health care distribution and ancillary businesses that can benefit from our infrastructure, systems and
        expertise. However, difficulties with the integration of any acquisition may impose substantial costs and delays and cause other
        unanticipated problems for us.

Products

At March 31, 2006 we distributed more than 10,000 products, including pharmaceuticals, vaccines, parasiticides, diagnostics, capital
equipment, supplies, veterinary pet food and nutritional products. For our fiscal year ended September 30, 2005 our product revenues were
comprised of approximately 38% pharmaceutical products, 19% vaccine products, 8% parasiticide products, 8% diagnostic products, 5%
capital equipment products and 22% of other supplies. In addition, we sell over 500 products under agency agreements with our vendors. Under
an agency agreement, we typically solicit orders and provide customer service for a commission, while the vendor stocks and ships the
products. We also have available on special order over 10,000 products that we do not normally stock in our warehouses. We continually seek
to update and improve the range of products we offer to address our customer requirements. Over 95% of our product sales for our fiscal years
ended September 30, 2005, 2004 and 2003 were from the sale of consumable medicines and supplies commonly required by veterinarians in
their practice. Historically, this aspect of our business has resulted in a recurring stream of revenues.

Pharmaceuticals, Vaccines and Parasiticides

We offer our customers a variety of pharmaceuticals, vaccines and parasiticides. Our pharmaceutical products typically include anesthetics,
analgesics, antibiotics, ophthalmics and hormones. In March 2005, we commenced distributing Pfizer’s Rimadyl®, a leading non-steroidal
anti-inflammatory drug which provides relief for dogs from pain associated with osteoarthritis and soft-tissue and orthopedic surgeries. Our
vaccine products are primarily comprised of small animal, equine and production animal biologicals. Our parasiticides are used for control of
fleas, ticks, flies, mosquitoes and internal parasites. In January 2005, we commenced selling FRONTLINE®, a leading flea and tick treatment
for dogs and cats, under an agency agreement with Merial Limited.

Diagnostics, Capital Equipment and Supplies

We offer a wide range of diagnostics, capital equipment and supplies to veterinarians. Diagnostic sales typically include consumable in-clinic
tests for detecting heartworm, lyme, feline leukemia and parvovirus, as well as consumable products for measuring blood chemistry, electrolyte
balance and cell counts. Our capital equipment sales include anesthesia machines, surgical monitors, diagnostic equipment, dental machines,
cages, lights and x-ray machines. We employ a team of capital equipment specialists to analyze the latest technologies and recommend
equipment that meets our customers’ specific needs. Additionally, our capital equipment specialists provide training on our capital equipment


                                                                         47
lines to our customers and our sales force. Our sales of supplies include syringes, instruments, bandages, IV products, surgical consumables,
grooming materials and other small equipment items used by veterinary practices.

Veterinary Pet Food and Nutritional Products

We offer our customers a broad selection of veterinary pet foods and nutritional products. We consider veterinary pet food to consist of two
categories: foods for specialty diets and premium pet foods. Specialty diets are recommended by veterinarians to address specific medical and
nutritional needs. Premium pet foods are recommended by veterinarians to promote optimal nutrition in healthy animals. Pet foods are typically
sold under agency agreements. Nutritional products include dietary supplements, vitamins, dental chews and specialty treats which either help
address specific medical conditions or are compatible with recommended nutritional guidelines.

Value-Added Services

We offer our customers a variety of value-added services, which we believe closely integrates us with our customers’ day-to-day operations
and provides them with meaningful incentives to continue ordering from us. These services include the following:

          Service                                                                          Description
          E-commerce platform                             On-line ordering system that provides information to veterinary practices
                                                          on products, vendor programs and purchasing history
          Pharmacy fulfillment                             Shipment of prescription animal health products to end-users on behalf of
                                                           veterinarians from our three licensed pharmacies located in Grand Prairie,
                                                           Texas, Harrisburg, Pennsylvania and Nampa, Idaho
          Inventory management system                      Flexible system that facilitates counting, maintaining and ordering
                                                           inventory in veterinary practices
          Equipment procurement consultation
                                                           Consultation, demonstrations and training provided by our dedicated
                                                           capital equipment specialists
          Special order fulfillment                        Procurement and shipment of over 10,000 unique products that we do not
                                                           normally stock in our warehouses
          Educational seminars                             Seminars for our customers covering business and medical topics,
                                                           frequently sponsored in conjunction with our vendors
          Pet cremation                                    Business units presently operating in Idaho and Wisconsin that serve
                                                           veterinary practices and their clients by providing cremation services


Customers

We currently serve more than 15,000 of the approximately 27,000 veterinary practices located throughout the United States. These veterinary
practices are typically small, privately-held businesses that we believe place at least one order per week to avoid storing and managing large
volumes of supplies. We believe that these veterinary practices usually purchase animal health products from multiple distributors. We seek to
be the principal provider of animal health products to our customer base.

We maintain a diverse and stable customer base. Independent veterinary practices have historically accounted for more than 80% of our
product sales. Also, for more than ten years, we have maintained distribution arrangements with Banfield, the nation’s largest private veterinary
practice with over


                                                                          48
450 veterinary hospitals, and our non-controlled affiliate, Feeders’ Advantage, a buying group composed of several of the largest cattle feeders
in the United States. Banfield accounted for approximately 10% of our product sales for our fiscal years ended September 30, 2005, 2004 and
2003, respectively and approximately 9% of our product sales for the six-months ended March 31, 2006. Feeders’ Advantage accounted for
approximately 6% of our product sales for our fiscal years ended September 30, 2005 and 2004, respectively, and approximately 7% of product
sales for our fiscal year ended September 30, 2003 and approximately 6% for the six-months ended March 31, 2006. The loss of Banfield or
Feeders’ Advantage or a deterioration in our relations with either of them could significantly affect our financial condition and results of
operations. Our ten largest customers, excluding Banfield and Feeders’ Advantage, accounted for approximately 5%, 7% and 6% of our
product sales for our fiscal years ended September 30, 2005, 2004 and 2003, respectively with no single customer representing more than 1%
of our product sales for our fiscal years ended September 30, 2005 and 2004 and one customer representing approximately 1% of product sales
for our fiscal year ended September 30, 2003. Our ten largest customers, excluding Banfield and Feeders’ Advantage, accounted for
approximately 6% of our product sales for the six-months ended March 31, 2006, with no single customer representing more than 1% of our
product sales. We typically do not enter into long-term contracts with our independent veterinary customers.

We are a party to two written agreements with Banfield, an Agreement for Product Purchases and an Agreement for Logistics Services. These
agreements govern the pricing, shipping and other terms and conditions upon which we sell our products and provide services to Banfield. The
agreements are effective through June 30, 2008, and thereafter may be renewed for additional twelve-month periods. The agreements may be
terminated by either party with or without cause upon 150 days prior written notice. Under the Agreement for Product Purchases, we provide a
limited warranty with respect to all goods sold by us and paid for by Banfield that good title to the products is conveyed, that the products are
delivered free of any security interest, that the products will conform to the description, grade and condition of the products invoiced, that there
will be an agreed upon time remaining before the expiration or out-of-code date on any product and that all products will be free of any defects
arising while the products are either in our possession or control or in the control of any carrier transporting the goods from us to Banfield. We
are also required to maintain insurance in an amount equal to at least the replacement cost of all property that is purchased by Banfield from
third parties and is held by us on their behalf.

Sales and Marketing

Our sales and marketing strategies are designed to establish and maintain strong customer relationships through personal visits by field sales
representatives, frequent telesales contact and direct marketing, emphasizing our broad product lines, competitive pricing, efficient ordering
capabilities, high levels of customer support and service and other value-added services. The key elements of our sales and marketing strategy
are:

                 Field Sales Representatives: Our sales force is a key component of our value-added approach. Due to the fragmented nature
             of the animal health products market, we believe that a large sales force is vital to effectively support existing customers and
             target potential customers. As of March 31, 2006, we had 142 field sales representatives covering most of the United States. Our
             field sales representatives educate customers on new veterinary products, assist in product selection and purchasing and offer
             inventory management solutions. Once a field sales representative has established a relationship with a customer, the field sales
             representative encourages the customer to use our telesales representatives and online ordering capabilities for day-to-day
             customer needs. Field sales representatives work under the supervision of regional sales managers within an assigned sales
             territory to ensure effective communication and timely sales calls with customers. Our field sales representatives


                                                                            49
             complement our telesales and direct marketing efforts and enables us to better market, service and support the sale of our products
             and services. Our field sales representatives are employees of our company and are compensated with a combination of salaries
             and commissions.

                Telesales: We support our field sales representatives and direct marketing efforts with telesales representatives in five call
             centers covering the United States. As of March 31, 2006, we had 95 telesales representatives. Telesales representatives work as
             partners with our field sales representatives, providing a dual coverage approach for individual customers. Telesales
             representatives process orders and generate new sales through frequent and direct contact with customers. Telesales
             representatives are responsible for assisting customers with ordering, purchasing decisions and general questions. Telesales
             representatives utilize our customized order entry system to process customer orders, access pricing, availability and promotional
             information about products, and research customer preferences and order history. Our five call centers are connected by our
             telecommunications system which enables them to operate as one virtual call center.

                Direct Marketing: We market to existing and potential customers by distributing product catalogs and monthly magazines.
             We publish our comprehensive animal health products catalog every other year. This catalog contains over 8,000 SKUs, includes
             detailed descriptions and specifications of our products and is often used as a reference tool by our customers and sales force. We
             also promote our products and services in our monthly magazine, the Messenger , which our field sales representatives use as a
             tool to educate customers on product and vendor programs. Additional marketing tools that we utilize include specialty catalogs,
             customer loyalty programs, specific product and vendor programs, flyers, faxes, order stuffers and other promotional materials.
             For the twelve-months ended March 31, 2006, we distributed more than 400,000 pieces of direct marketing materials to over
             18,700 existing and potential customers. We also participate in national and regional trade shows to extend our customer reach
             and enhance customer interaction.

                E-Business Platform: We provide on-line ordering, valuable business information and value-added services to veterinarians
             via our primary Internet site, www.mwivet.com , and customized Internet sites that we maintain for two of our largest customers.
             Customers can use our Internet sites to order products, learn more about products and vendor programs, print forms needed for
             their veterinary practice, review their historical purchases and manage their inventory. For the six-months ended March 31, 2006
             and for our fiscal years ended September 30, 2005, 2004 and 2003, approximately 23%, 21%, 18% and 18%, respectively, of our
             product sales were generated through orders placed over the Internet.

Product Sourcing

We currently distribute more than 10,000 products sourced from more than 400 vendors, including most major vendors of animal health
products that sell through distributors. We believe that we are a leading distributor for many of these vendors.

We currently do not manufacture any of our products and are dependent on vendors for our supply of products. We believe that effective
purchasing is a key factor in maintaining our position as a leading provider of animal health care products. We regularly assess our purchasing
needs and our vendors’ product offerings and prices to obtain products at favorable prices. While we purchase products from many vendors and
there is generally more than one vendor for most animal health product categories, our concentration of aggregate purchases with key vendors
is significant. Our top three vendors, Fort


                                                                         50
Dodge, Pfizer and Vedco, supplied products that accounted for approximately 47% of our revenues for the six-months ended March 31, 2006,
approximately 45% of our revenues for our fiscal years ended September 30, 2005 and 2004, and approximately 43% for our fiscal year ended
September 30, 2003. Our ten largest vendors accounted for approximately 72%, 73%, 72% and 73% of our revenues for the six-months ended
March 31, 2006 and for our fiscal years ended September 30, 2005, 2004 and 2003, respectively.

There are two major types of transactions that can affect the flow of our products from our vendors, through us, to our customers. The method
of selling products to veterinarians is dictated by our vendors. Traditional “buy/sell” transactions, which account for the vast majority of our
business, involve the direct purchase of products by us from vendors, which we manage and store in our warehouses. A customer then places
an order with us, and the order is then picked, packed, shipped and invoiced by us to our customer, followed by payment from our customer to
us.

We also sell certain product lines to our customers under agency agreements with some of our vendors. Under this model, when we receive
orders for products from the customer, we transmit the order to the vendor who then picks, packs and ships the products. In some cases our
vendor invoices and collects payment from our customer, while in other cases we invoice and collect payment from our customer. We receive a
commission payment for soliciting the order and for providing other customer service activities. Our operating expenses associated with agency
sales transactions are lower than in traditional “buy/sell” transactions.

We have written agreements with approximately 30 of our vendors, including Fort Dodge and Pfizer. Our distribution agreement with Fort
Dodge provides that we shall act as a distributor of Fort Dodge products in the United States on a non-exclusive basis. Fort Dodge may reduce
the size of our territory upon 30 days written notice. We are required to actively promote and solicit sales of Fort Dodge products and to
include their products in our regular sales promotions. In return, we are entitled to participate in Fort Dodge’s current distributor incentive
program. Fort Dodge is required to indemnify us against any claims alleging that the Fort Dodge products are defective, except in certain
limited situations. We are required to maintain sufficient inventory of each Fort Dodge product to meet our anticipated demand and to store the
products in accordance with their respective label instructions. The distribution agreement had an original term that expired on March 31, 2005
but the agreement automatically renews for additional periods of one year. The agreement may be terminated by either party with or without
cause upon 90 days prior written notice.

Our livestock products agreement with Pfizer provides that we shall supply selected customers in the cattle and swine fields with Pfizer
products. In return, we are entitled to certain service fees and rebates. We are required to maintain sufficient inventory to meet our anticipated
demand on a monthly basis and to store the Pfizer products in accordance with their respective label instructions. Pfizer also reserves the right
to sell directly to our customers or any other party. The livestock products agreement has a one year term that expires on December 31, 2006.

Animal health product vendors typically implement sales promotions for products distributed to veterinarians that can affect the timing in
which we recognize revenues. In addition, at the time we negotiate vendor agreements for the upcoming year, our vendors typically establish
sales growth goals for us to meet in order to receive performance rebates. Since many of our vendor rebates are based on a calendar year,
historically the quarter ended December 31 has been our most significant quarter for recognition of rebates.

Product returns from our customers and to our vendors occur in the ordinary course of business. We extend our customers the same return of
goods policies as are extended to us by our vendors. We do not believe that our operations will be adversely impacted due to the return of
products.


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Information Systems

In 2004, we successfully completed a comprehensive upgrade of our enterprise information system, the central hub for all of our business
processes. Our information systems enable the centralized management of key functions, including accounts receivable, inventory
management, accounts payable, payroll, purchasing, sales and order fulfillment. These systems allow us to efficiently manage our growth,
deliver superior customer service, effectively target customers, manage financial performance and monitor daily operational statistics.

Distribution

As of May 8, 2006, we distribute our products from eleven strategically located distribution centers throughout the United States. We opened
our twelfth distribution center located in Orlando, Florida in June 2006. Once a customer’s order is entered into our customized order entry
system, it is electronically transmitted to the distribution center that carries the product and is closest to the customer’s location. Following
receipt of the order, a document is printed in the warehouse which reflects the bin location of the product to facilitate product fulfillment. The
order is then packaged and shipped along with an itemized invoice. We maintain inventory levels in our warehouses appropriate to satisfy
customer demand for prompt delivery and fulfillment of their product orders. Inventory levels are managed on a daily basis through our
information systems. In order to meet the rapid delivery requirements of our customers, we offer next-day delivery service on most of the
products we stock in our warehouses. We estimate that as of March 31, 2006, we shipped same day from our warehouses 97% to 98% of the
dollar value of orders placed by our customers. We currently ship the majority of our orders through UPS, with the balance of our orders being
shipped by our own delivery trucks, regional carriers and other national carriers.

Acquisitions

In November 2004, we acquired certain assets of Memorial Pet Care, Inc., a pet crematorium located in Meridian, Idaho. Memorial Pet Care
presently operates in southwest Idaho and eastern Oregon and serves veterinary practices and their clients by providing cremation services.

In January 2005, we acquired substantially all of the assets of Vetpo, a regional animal health products distributor located in Holland,
Michigan. This acquisition has enabled us to substantially expand our market presence and improve our distribution capabilities in Michigan,
Illinois, Indiana, Ohio and Wisconsin.

On May 8, 2006, we acquired substantially all of the assets of Northland for approximately $4.0 million, consisting of $3.0 million in cash and
28,744 shares of unregistered restricted common stock. The acquisition agreement also calls for an upward adjustment to be paid in cash if
Northland’s working capital exceeds a pre-determined level. Northland presently operates in Clear Lake, Wisconsin and is a distributor of
animal health products to approximately 500 veterinary practices and producers across the Midwestern United States.

Competition

The distribution and manufacture of animal health products is highly competitive. We compete with numerous vendors and distributors based
on customer relationships, service and delivery, product selection, price and e-business capabilities. Most of our products are available from
several sources, including other distributors and vendors, and our customers tend to have relationships with several distributors. In addition, our
competitors could obtain exclusive rights to distribute certain products, eliminating our ability to distribute those products. Consolidation in the
veterinary distribution business


                                                                           52
could result in existing competitors increasing their market share, which could give them greater pricing power, decrease our revenues and
profitability, and increase the competition for customers. Our primary competitors, excluding vendors, include the following:

                Butler Animal Health Supply;

             Henry Schein, Inc.;

                Lextron Animal Health, Inc.;

                Professional Veterinary Products, Ltd.;

                Vet Pharm, Inc.;

                Walco International, Inc.;

                Webster Veterinary Supply, a division of Patterson Companies, Inc.; and

                other national, regional, local and specialty distributors.

The role of the animal health product distributor has changed dramatically during the last decade. Successful distributors are increasingly
providing value-added services in addition to the products they traditionally provided. We believe that to remain competitive we must continue
to add value to the distribution channel, while removing unnecessary costs associated with product movement.

Distribution of animal health products is characterized by either “ethical” or “over-the counter,” commonly referred to as OTC, channels of
product movement. Ethical distribution is defined as those sales of goods to licensed veterinarians for use in their professional practice. Many
of these products are prescription and must be sold or prescribed by a licensed professional. OTC distribution is the movement of goods to the
animal owner and the end-user. Many of these products also are purchased by the licensed veterinarian for professional use or for resale to their
client. There are numerous ethical and OTC distribution companies operating throughout the United States and competition in the veterinary
distribution industry is intense.

Trademarks

We have registered with the United States Patent and Trademark Office the marks “MWI,” “MWI Design” and “MWIVET.com,” and we have
filed applications to register the marks “VETONE” and “VETRIMEC.” We believe that the MWI mark is well recognized in the animal health
products industry and by veterinarians and is therefore a valuable asset of ours.

Employees

As of March 31, 2006, we had 627 employees across the United States. We have not experienced a shortage of qualified personnel in the past,
and believe that we will be able to attract such employees in the future. None of our employees is a party to a collective bargaining agreement,
and we consider our relations with our employees to be good.


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Website

Our website address is www.mwivet.com. The information on our website is not incorporated as a part of this prospectus.

Governmental Regulation

Our vendors of pharmaceuticals, vaccines, parasiticides and certain controlled substances are typically regulated by federal agencies, such as
the FDA, the USDA, the EPA and the DEA, as well as most similar state agencies. Therefore, we are subject, either directly or indirectly, to
regulation by the same agencies. Most states and the DEA require us to be registered or otherwise keep a current permit or license to handle
controlled substances. Manufacturers of vaccines are required by the USDA to comply with various storage and shipping criteria and
requirements for vaccines. To the extent we distribute such products, we must comply with the same requirements, including, without
limitation, the storage and shipping requirements for vaccines.

Most state boards of pharmacy require us to be licensed in their respective states for the sale of pharmaceutical products and medical devices
within their jurisdictions. As a distributor of prescription pharmaceutical products, we are subject to the Prescription Drug Marketing Act
(“PDMA”). The PDMA provides governance and authority to the states to provide minimum standards, terms and conditions for the licensing
by state licensing authorities of persons who “engage” in wholesale distribution (as defined by each state regulatory agency) in interstate
commerce of prescription drugs. With this authority, states require site-specific registrations for the parties that engage in the selling and/or
physical distribution of pharmaceutical products into their state in the form of out-of-state registrations. Selling and/or distribution without the
appropriate registrations may be subject to fines, penalties, misdemeanor or felony convictions, and/or seizure of the products involved. We
have a Manager of Regulatory Compliance and have engaged an outside consultant to assist us in meeting and complying with the various state
licensure requirements to which we are subject.

Our pet cremation business is subject to state and local zoning laws, and we are required to maintain permits for the construction and operation
of an animal incineration device. We are also required to have an air pollution permit in connection with the operation of our pet cremation
business.

Some states (as well as certain cities and counties) require us to collect sales taxes/use taxes on certain types of animal products. We are also
subject to laws governing our relationship with employees, including minimum wage requirements, overtime, working conditions and
citizenship requirements. In addition, we are subject to additional regulations regarding our hiring practices because several federal, state and
local governmental agencies are our customers.

Environmental Considerations

We do not currently manufacture or alter in any way the composition of products that we distribute. All products are distributed in compliance
with the relevant rules and regulations as approved by various state and federal agencies.

Legal Proceedings

We are not currently a party to any material pending legal proceedings and are not aware of any claims that could have a materially adverse
effect on our financial position, results of operations, or cash flows.


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Properties

The table below provides a summary of our principal facilities as of May 8, 2006:

                                                         Total Square   Leased or
           Location                                         Feet (1)     Owned                    Principal Function
           Meridian, Idaho                                  34,000       Leased     Headquarters and call center
           Atlanta, Georgia                                 25,000       Leased     Distribution center
           Clear Lake, Wisconsin                            25,000       Leased     Distribution center
           Denver, Colorado                                 59,000       Leased     Distribution center and call center
           Fife, Washington                                 30,000       Leased     Distribution center
           Glendale, Arizona                                16,000       Leased     Distribution center
           Grand Prairie, Texas                             35,000       Leased     Distribution center, call center and pharmacy
           Harrisburg, Pennsylvania                         25,000       Leased     Distribution center and pharmacy
           Holland, Michigan                                25,000       Leased     Distribution center and call center
           Nampa, Idaho                                     30,000       Leased     Distribution center and pharmacy
           Orlando, Florida (2)                             30,000       Leased     Distribution center
           San Antonio, Texas                               19,000       Leased     Distribution center and call center
           Visalia, California                              52,000       Leased     Distribution center

(1)       Rounded to the nearest thousand square feet.

(2)       Opened in June 2006.

History

Our business commenced operations as part of a veterinary practice in 1976 and was incorporated as MWI Drug Supply, Inc., an Idaho
corporation, in 1980. MWI Drug Supply, Inc. was acquired by Agri Beef Co. in 1981. MWI Veterinary Supply Co. was incorporated as an
independent subsidiary of Agri Beef Co. in September 1994. Effective June 18, 2002, MWI Holdings, Inc. was formed by Bruckmann, Rosser,
Sherrill & Co. II, L.P. (“BRS”) for the sole purpose of acquiring all of the outstanding stock of MWI Veterinary Supply Co. from Agri Beef
Co. As a result of this transaction, MWI Veterinary Supply Co. became a wholly-owned subsidiary of MWI Holdings, Inc. On April 21, 2005
we changed our name from MWI Holdings, Inc. to MWI Veterinary Supply, Inc.


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                                                                MANAGEMENT

Directors and Executives

The following table sets forth the names, ages and titles, as well as a brief account of the business experience, of each person who is a director
or executive of MWI:

         Name                                          Age                                     Title
         James F. Cleary, Jr.                          43     Board Director, President and Chief Executive Officer
         Mary Patricia B. Thompson                     43     Vice President, Secretary and Chief Financial Officer
         James S. Hay                                  63     Chief Information Officer
         James W. Culpepper                            52     Director of Inventory Management
         Jeffrey J. Danielson                          46     Director of Sales
         Bryan P. Mooney                               38     Director of Operations
         James M. Ross                                 57     Director of Banfield Accounts and Director of Business Development
         John R. Ryan                                  37     Director of Marketing & Analysis
         Keith E. Alessi                               51     Board Director
         Bruce C. Bruckmann                            52     Board Director
         John F. McNamara                              71     Board Director, Chairman
         A. Craig Olson                                55     Board Director
         Robert N. Rebholtz, Jr.                       42     Board Director


James F. Cleary, Jr. has served as President since March 2000 and Chief Executive Officer since June 2002. Mr. Cleary has also been a
member of the board of directors since June 2002. He joined MWI in January 1998 as Director of National Accounts and was promoted to Vice
President of Demand Generation in 1999. Mr. Cleary was Vice President of Agri Beef Co., MWI’s former parent, from 1996 to 1998. From
1990 to 1996, Mr. Cleary was employed in management positions with Morrison Knudsen Corporation and its affiliate MK Rail Corporation.
Mr. Cleary graduated from Dartmouth College in 1985 with a Bachelor of Arts in Economics and received his Masters of Business
Administration from Harvard Business School in 1990. Mr. Cleary is also a member of the board of directors of Agri Beef Co. and Seroyal
Holdings, L.P., and a manager of Feeders’ Advantage, L.L.C. Mr. Cleary is the brother-in-law of Mr. Robert Rebholtz, one of our board
directors.

Mary Patricia B. Thompson has served as Vice President, Secretary and Chief Financial Officer since June 2002. Ms. Thompson joined Agri
Beef Co. in 1989 as the Feedlot and Commodity Division Controller. In September 1991, Ms. Thompson was promoted to Controller of MWI
Veterinary Supply Co., then a wholly owned subsidiary of Agri Beef Co. Prior to joining Agri Beef Co., Ms. Thompson worked for Arthur
Andersen LLP from 1985 to 1989, where she provided auditing and accounting services. Ms. Thompson graduated from the University of
Idaho in 1985, summa cum laude, with a Bachelor of Science in Accounting. Ms. Thompson is a licensed Certified Public Accountant.
Ms. Thompson is also a member of the board of directors of the American Veterinary Distributors Association.

James S. Hay has served as Chief Information Officer since September 2002. Mr. Hay joined Agri Beef Co. in 1996 as Vice President of
Information Systems. Prior to joining Agri Beef Co., Mr. Hay served as Director of Management Information Systems at Natural Wonders Inc.
from 1991 to 1995; Director of Management Information Systems at the Oakland Tribune from 1989 to 1991; Vice President and Chief
Information Officer of Liquor Barn, Inc. from 1987 to 1989; Director of Information Services at Genstar Corporation from 1974 to 1987;
management consultant at Price Waterhouse from 1968 to 1974; and as a systems engineer at IBM Corporation from 1965 to 1968. Mr. Hay
graduated from the University of Manitoba in 1965 with a Bachelor of Science in Mathematics and Physics.


                                                                           56
James W. Culpepper has served as Director of Inventory Management since 1998. Mr. Culpepper joined MWI in 1997 as General
Merchandise Manager. Prior to joining MWI, Mr. Culpepper worked for Payless Drug Stores for 20 years. During that period, Mr. Culpepper
held various positions, including pharmacist, merchandiser and buyer of pharmaceutical supplies, and Inventory Control Manager.
Mr. Culpepper graduated from Oregon State University’s School of Pharmacy in 1977.

Jeffrey J. Danielson has served as Director of Sales since 2001. Mr. Danielson joined MWI Veterinary Supply Co. in 1985 as an Outside Sales
Representative, serving the state of Washington. From 1989 to 1991, Mr. Danielson served as Assistant Sales Manager and from 1991 to 2001
served as National Sales Manager. Mr. Danielson graduated from Colorado State University in 1983 with a Bachelor of Science in Agricultural
Business.

Bryan P. Mooney has served as Director of Operations since May 2005. Mr. Mooney joined MWI in January 1994 as the Operations Manager
of our Denver, Colorado distribution operation and served in that capacity until May 1998. From May 1998 until February 2005, Mr. Mooney
served as Manager of Transportation and Logistics and from January 2005 until May 2005 as the Western Regional Operations Manager.
Mr. Mooney graduated from the University of Wyoming in 1991 with a Bachelor of Science in Agricultural Business.

James M. Ross has served as Director of Banfield Accounts since April 2001 and as Director of Business Development since 2003. Prior to
joining MWI, Mr. Ross worked for 32 years in the human medical supply distribution industry, where Mr. Ross served as an operations
manager for Intermountain Surgical Supply of Boise, Idaho from 1970 to 1972 and as Account Manager from 1972 to 1976; as Branch
Manager and General Manager of Intermedco, Inc.’s Oklahoma operations from 1976 to 1985; as Vice President, West Region Manager of
Durr-Fillauer Medical of Montgomery, Alabama from 1985 to 1996; and as Vice President of Operations for Bergen Brunswig Medical
Corporation, a Division of Bergen Brunswig Corporation in Orange, California from 1996 to 1998. In 1999, Mr. Ross became Executive
Vice President of Sales and Distribution and in December 1999 assumed the additional position of Chief Operating Officer of Bergen Brunswig
Medical Corporation and served in those positions until September 2000. From January 2001 until April 2001, Mr. Ross served as Vice
President, General Manager of Columbia Diagnostics, a division of Fisher Scientific. Mr. Ross graduated from Boise State University in 1972
with a Bachelor of Science in Business Administration.

John R. Ryan has served as Director of Marketing & Analysis since 2000. Mr. Ryan joined MWI in June 1995 as an Outside Sales
Representative and served in such capacity until June 2000. Prior to joining MWI, Mr. Ryan worked for the Virbac Corporation (a companion
animal pharmaceutical company) as a Territory Manager from 1993 to 1995. Mr. Ryan graduated from the University of California, Davis in
1993, with a Bachelor of Science in Animal Physiology.

Keith E. Alessi has been a member of the board of directors since 2003. Mr. Alessi has been the Chairman and Chief Executive Officer of
Lifestyle Improvement Centers, LLC, a franchiser and operator of behavioral modification centers in the United States and Canada, since
February 2003. Mr. Alessi has been an Adjunct Professor of Law at The Washington and Lee University School of Law since 1999 and an
Adjunct Lecturer at The University of Michigan Graduate School of Business since 2001. Mr. Alessi is also a director and chairman of the
audit committees for Town Sports International, Inc., an operator of health clubs in New York, Philadelphia, Boston, Washington and Zurich,
H&E Equipment Services Inc., a servicer and renter of equipment used in the construction trades, and Nanocerox, Inc., a nanotechnology
company. Mr. Alessi was previously Chief Executive Officer of Telespectrum Worldwide, Inc. from April 1998 to February 2000 and Jackson
Hewitt, Inc from May 1996 to April 1998. Mr. Alessi is a Certified Public Accountant.


                                                                       57
Bruce C. Bruckmann has been a member of the board of directors since June 2002. Mr. Bruckmann is a founder and has been a Managing
Director of Bruckmann, Rosser, Sherrill & Co. L.L.C., a venture capital firm, since its formation in 1995. He served as an officer of Citicorp
Venture Capital, Ltd. from 1983 through 1994. Prior to joining Citicorp Venture Capital, Ltd., Mr. Bruckmann was an associate at the New
York law firm of Patterson, Belknap, Webb & Tyler. He received his Bachelor of Arts from Harvard College and his Juris Doctor from
Harvard Law School. Mr. Bruckmann is also currently a director of Mohawk Industries, Inc., Town Sports International, Inc., and H&E
Equipment Services L.L.C. Mr. Bruckmann is also a director of several private companies.

John F. McNamara has been a member of the board of directors since June 2002 and our Chairman since December 2005. Mr. McNamara is
the Founder and retired Chairman and Chief Executive Officer of AmeriSource Corporation, now a part of AmerisourceBergen Corporation.
Mr. McNamara retired in May 2000. Prior to his work with AmeriSource Corporation, Mr. McNamara worked for McKesson Corporation for
20 years. He has served on numerous boards in an advisory capacity for both private and public companies. Mr. McNamara has also served as a
Chairman of the International Federation of Pharmaceutical Wholesalers and Chairman of the National Wholesale Drug Association.

A. Craig Olson has been a member of the board of directors since April 2006. Mr. Olson is a Principal of The CAPROCK Group, Inc., an
independent investment advisor. Prior to his work with The CAPROCK Group, Inc., Mr. Olson served as Executive Director and President and
Member of the Board of the J.A. and Kathryn Albertson Foundation from 2002 to 2005. Mr. Olson also worked 28 years from 1974 to 2001
with Albertson’s, Inc., one of the largest retail food and drug chains in the United States, where he served in various executive and management
positions including Executive Vice President and Chief Financial Officer from 1999 to 2001, Senior Vice President, Finance and Chief
Financial Officer from 1991 to 1999, and Group Vice President, Finance from 1986 to 1991. Mr. Olson graduated from the University of Idaho
in 1974 with a Bachelors of Science in Accounting and attended Stanford University, Graduate School of Business, Financial Management
Program in 1988. Mr. Olson is a Certified Public Accountant.

Robert N. Rebholtz, Jr. has been a member of the board of directors since June 2002. Mr. Rebholtz has been the President and Chief Executive
Officer of Agri Beef Co. in Boise, Idaho since 1997. Mr. Rebholtz is also a director of Agri Beef Co. and the Bishop Kelly High School Board
of Governance and a manager of Feeders’ Advantage L.L.C. In addition, Mr. Rebholtz is a member of the National Cattlemen Beef Association
and Idaho, Nevada, Washington and Kansas livestock state associations. Mr. Rebholtz graduated from the University of Santa Clara with a
Bachelor of Arts in Finance in 1986 and received his Masters of Business Administration in 1992 from Harvard Business School. Mr. Rebholtz
is the brother-in-law of Mr. Cleary, MWI’s President and Chief Executive Officer.

Committees of Our Board of Directors

Our board of directors direct the management of our business, property and affairs, as provided by Delaware law and conducts its business
through meetings of the full board of directors and three standing committees: an audit committee, a compensation committee and a corporate
governance and nominating committee. The composition, duties and responsibilities of these committees are set forth below. Committee
members will hold office for a term of one year. In the future, our board may establish other committees, as it deems appropriate, to assist it
with its responsibilities.

Audit Committee

The audit committee consists of Messrs. Alessi, Olson and McNamara. The board of directors has determined that Messrs. Alessi and Olson
qualify as “audit committee financial experts” and


                                                                          58
Messrs. Alessi, Olson and McNamara are independent as defined in the applicable SEC and Nasdaq rules and regulations. The composition of
the audit committee satisfies the independence requirements of the Nasdaq National Market.

The Audit Committee is responsible for, among other things:

               directly appointing, retaining, evaluating, compensating and terminating our independent registered public accounting firm;

               discussing with our independent registered public accounting firm their independence from management;

               reviewing with our independent registered public accounting firm the scope and results of their audit;

                pre-approving all audit and permissible non-audit services to be performed by the independent registered public accounting
             firm;

                overseeing the financial reporting process and discussing with management and our independent registered public accounting
             firm the interim and annual financial statements that we file with the SEC; and

               reviewing and monitoring our accounting principles, policies and financial and accounting controls.

Compensation Committee

The compensation committee consists of Messrs. Alessi and McNamara. The composition of the compensation committee satisfies the
independence requirements of the Nasdaq National Market.

The Compensation Committee is responsible for, among other things:

               reviewing and recommending director compensation policies to the board of directors;

                making recommendations, at least annually, to the board of directors regarding our policies relating to the amounts and terms
             of all compensation of our executives; and

                administering and discharging the authority of the board of directors with respect to our 2002 Stock Option Plan and our 2005
             Stock-Based Incentive Compensation Plan.

Corporate Governance and Nominating Committee

The corporate governance and nominating committee consists of Messrs. Alessi and McNamara. The composition of the corporate governance
and nominating committee satisfies the independence requirements of the Nasdaq National Market.

The Corporate Governance and Nominating Committee is responsible for, among other things:

               selecting potential candidates to be nominated for election to the board of directors;

               recommending potential candidates for election to the board of directors;


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                reviewing corporate governance matters; and

                making recommendations to the board of directors concerning the structure and membership of other board committees.

Director Compensation

All non-employee directors receive an annual retainer of $20,000 payable in quarterly installments. Non-employee directors who serve as
committee chairs received $2,000 annually payable in quarterly installments. Non-employee directors also receive $2,000 per board meeting
attended and $1,000 per board conference call attended. Each non-employee director who serves on a committee receives $1,000 per committee
meeting attended and $500 per committee call attended. All directors are reimbursed for out-of-pocket expenses. On April 1, 2006, we granted
to Mr. Olson 1,000 shares of restricted stock, which vests annually over three years.

Compensation Committee Interlocks and Insider Participation

Our compensation committee is comprised of Messrs. Alessi and McNamara. All decisions regarding our executive compensation have been
made by the compensation committee since we became a public company in August 2005. Our board of directors was responsible for all
decisions regarding executive compensation prior to the creation of our compensation committee. None of our executives serve as a member of
the board of directors or compensation committee of an entity that has an executive officer serving as a member of our board of directors, other
than Mr. Cleary, our President and Chief Executive Officer, who is a director of Agri Beef Co. Mr. Rebholtz, one of our board directors, is the
President and Chief Executive Officer of Agri Beef Co.

Executive Compensation

The following tables summarize, for the periods indicated, the principal components of compensation for our Chief Executive Officer and the
four highest compensated executives for our fiscal years ended September 30, 2005, 2004 and 2003. We refer to these persons as our named
executive officers.


                                                                          60
                                                                  Summary Compensation Table

                                                                                        Annual Compensation
                                                                                                       Other Annual                         All Other
      Name and Principal Position                            Year        Salary           Bonus      Compensation (1)                     Compensation (2)
       James F. Cleary, Jr.                                   2005      $ 169,158        $ 84,666        $   7,000                          $   12,543
          President and Chief                                 2004        164,231          82,400            7,000                              11,750
          Executive Officer                                   2003        152,135          90,000            7,000                              11,166
      Jeffrey J. Danielson                                    2005        125,485          54,814            6,500                              10,788
        Director of Sales                                     2004        121,554          52,960            6,500                               9,104
                                                              2003        108,408          57,845            6,500                               8,870
      James S. Hay                                            2005        119,818          59,976               —                               10,759
        Chief Information Officer                             2004        116,057          58,229               —                               10,680
                                                              2003        105,813          63,600               —                                9,025
      James M. Ross                                           2005        118,756          59,445               —                               10,664
        Director of Business                                  2004        115,028          57,713               —                               10,586
        Development                                           2003        105,060          63,036               —                                8,317
       Mary Patricia B. Thompson                              2005        112,189          56,178               —                               10,063
         Vice President, Chief                                2004        107,621          54,017               —                                9,896
         Financial Officer and                                2003         97,293          58,376               —                               76,861
         Secretary
(1)             Represents amounts paid as automobile allowance.

(2)             “All Other Compensation” consists of:

              matching contributions to our 401(k) plan for each named executive officer;

              contributions to our defined contribution profit sharing plan for each named executive officer;

              insurance premiums paid by us on behalf of each named executive officer; and

              for 2003, in the case of Ms. Thompson, amounts received based on appreciation in the value of the stock of Agri Beef Co.

The following table shows the amount of each category of “All Other Compensation” received by each named executive officer in 2005:

                                                                                             401(k)                      Profit
                                                                                           Matching                   Sharing Plan            Insurance
        Name                                                                              Contribution                Contribution            Premiums
        James F. Cleary, Jr.                                                               $     6,218                 $     6,300              $   25
        Jeffrey J. Danielson                                                                    5,354                       5,409                   25
        James S. Hay                                                                            5,340                       5,394                   25
        James M. Ross                                                                           5,293                       5,346                   25
        Mary Patricia B. Thompson                                                               4,987                       5,051                   25




                                                                                          61
Option Grants in Last Fiscal Year

We did not grant any stock options to our named executive officers during 2005.

Aggregated Option Exercises During 2005 and Year-End Option Values

The following table sets forth certain information concerning the number and value of unexercised options held by each of our named
executive officers, as of September 30, 2005. No options were exercised by the named executive officers during 2005. The value of
in-the-money stock options represents the positive spread between the exercise price of stock options and the fair market value of the options,
based upon the stock’s closing price of $19.95 as of September 30, 2005, minus the exercise price per share.

                                                          Number of Securities                               Value of Unexercised
                                                         Underlying Unexercised                            In-the Money Options at
                                                      Options at September 30, 2005                           September 30, 2005
Named Executive Officer                           Exercisable             Unexercisable                 Exercisable       Unexercisable
James F. Cleary, Jr.                                   36,264                    24,175                 $   716,874       $     477,896
Jeffrey J. Danielson                                   36,264                    24,175                     716,874             477,896
James S. Hay                                           36,264                    24,175                     716,874             477,896
James M. Ross                                          36,264                    24,175                     716,874             477,896
Mary Patricia B. Thompson                              36,264                    24,175                     716,874             477,896


Executive Stock Agreements

Each of our named executive officers is party to an executive stock agreement. The executive stock agreements provide that if the executive’s
employment is terminated for any reason other than for cause or pursuant to a voluntary termination that does not occur within 90 days of a
good reason event (defined to include relocation of our executive offices by more than 75 miles or a material reduction in the executive’s
responsibilities or compensation), we are required to continue to pay the executive’s base salary for a period of twelve months after
termination. The executive stock agreements also provide that the executive will not compete against us during the term of the executive’s
employment and for one year thereafter (two years in the case of Mr. Cleary). We are not required to make any severance payment if we
provide the executive with written notice within 15 days of their termination that we have elected to waive the covenant not to compete against
us.

The executive stock agreements also include the grant of four separate nonqualified stock options to purchase 12,088 shares of our common
stock and one separate nonqualified stock option to purchase 12,087 shares of our common stock. The first of these options was eligible to
begin vesting on September 30, 2002 if certain EBITDA and return on net assets targets set forth in the executive stock agreements were
achieved by that date. Another option was or is eligible to begin vesting on each of September 30, 2003, 2004, 2005 and 2006, respectively,
based on the achievement of certain EBITDA and return on net assets targets set forth in the executive stock agreements. The EBITDA and
return on net assets targets for each of September 30, 2002, 2003, 2004 and 2005 have been achieved. The options eligible to begin vesting on
September 30, 2002, 2003 and 2004, respectively, vest at the rate of 20% per year beginning on September 20, 2003, 2004 and 2005,
respectively. The options eligible to begin vesting on September 30, 2005 and 2006, respectively, vest at the rate of 25% and 33.33% per year,
respectively, beginning on September 30, 2006 and 2007, respectively. The vesting for the stock options that began to vest on September 30,
2002, 2003 and 2004 was accelerated and became fully vested at the completion of our initial public offering in August 2005.


                                                                          62
Employee Benefit Plans

Defined Contribution Plan

Through March 31, 2004, we, along with Feeders’ Advantage and Agri Beef Co., participated in a multiple-employer defined contribution
profit sharing plan with a 401(k) arrangement covering all of our employees. On April 1, 2004 we, along with Feeders’ Advantage, established
a new multiple-employer defined contribution profit sharing plan with a 401(k) arrangement and the account balances for all eligible
employees were transferred to this plan.

To become eligible for the 401(k) portion of the plan, the employee must complete three-months of service and attain the age of twenty-one. To
become eligible for the profit sharing portion of the plan an employee must complete two years of service and attain the age of twenty-one.
Participation is automatic.

The 401(k) portion of the plan allows for employer matching contributions. We are required to match 50.0% of the employee’s contribution up
to 6.0% of the employee’s salary. Our combined matching contributions for the 401(k) portion of the plan were $548,854, $444,392 and
$431,371 for our fiscal years ended September 30, 2005, 2004 and 2003, respectively. An employee’s contributions are fully vested
immediately while our contributions vest over a five-year period.

Contributions to the profit sharing portion of the plan are discretionary, ranging from 0.0 to 3.0%, and are approved by our board of directors.
Total combined contributions for our fiscal years ended September 30, 2005, 2004 and 2003 were $597,911, $447,842 and $423,381,
respectively. The contributions made by us are fully vested immediately.

2002 Stock Option Plan

Our board of directors has ratified the adoption of our 2002 Stock Option Plan effective as of June 18, 2002 to provide our directors, executives
and other key employees with additional incentives by allowing them to acquire an ownership interest in our business and, as a result,
encouraging them to contribute to our success. The number of shares issued under the plan may not exceed 543,955, after giving effect to a 5.5
for 1 common stock split in the form of a stock dividend that was completed on July 28, 2005. The options granted under the plan are
nonqualified stock options that have an exercise price per share equal to the price set at the time of grant by our board of directors or by a
committee of the board designated to administer the plan. The term of each option is also determined by our board of directors or by a
designated committee of the board but the term of any option may not exceed ten years from the date of grant.

2005 Stock-Based Award and Incentive Compensation Plan

We have adopted our 2005 Stock-Based Award and Incentive Compensation Plan (the “2005 Plan”). Under the 2005 Plan, we may offer
restricted shares of our common stock and grant options to purchase shares of our common stock to selected employees. The purpose of the
2005 Plan is to promote our long-term financial success by attracting, retaining and rewarding eligible participants. The number of shares
issued under the 2005 Plan may not exceed 1,200,000 shares. We intend to amend the 2005 Plan to permit non-employee directors to
participate in the 2005 Plan, with any grants made to non-employee directors being subject to ratification by our stockholders of the
amendment to the 2005 Plan.

The 2005 Plan is administered by the compensation committee or, if there shall not be any committee serving, our board of directors. The
compensation committee has discretionary authority to determine


                                                                          63
which employees will be eligible to participate in the 2005 Plan and will consider participants recommended by our President and Chief
Executive Officer. The compensation committee will establish the terms and conditions of the restricted stock and options awarded under the
2005 Plan. However, in no event may the exercise price of any options granted under the 2005 Plan be less than the fair market value of the
underlying shares on the date of grant.

The 2005 Plan permits us to grant both incentive stock options and non-qualified stock options. The compensation committee will determine
the number and type of options granted to each participant, the exercise price of each option, the duration of the options (not to exceed ten
years), vesting provisions and all other terms and conditions of such options in individual option agreements. However, the compensation
committee will not be permitted to exercise its discretion in any way that will disqualify the 2005 Plan under Section 422 of the Code. The
2005 Plan provides that upon termination of employment with us, unless determined otherwise by the compensation committee at the time
options are granted, the exercise period for vested options will generally be limited, provided that vested options will be canceled immediately
upon a termination for cause. The 2005 Plan provides for the cancellation of all unvested options upon termination of employment with us,
unless determined otherwise by the compensation committee at the time options are granted.

The 2005 Plan also permits us to offer participants restricted stock. The compensation committee will determine the number of shares of
restricted stock offered to each participant, the purchase price of the shares of restricted stock, if any, the period the restricted stock is unvested
and subject to forfeiture and all other terms and conditions applicable to such restricted stock in individual restricted stock subscription
agreements. The 2005 Plan provides that restricted stock may be forfeited upon a participant’s termination of employment, unless determined
otherwise by the compensation committee at the time of purchase.

The 2005 Plan provides that upon a change in control, the compensation committee may, at its discretion:

                 fully vest any options or restricted stock awarded under the 2005 Plan;

                 cancel any outstanding options in exchange for a payment in cash of an amount equal to the excess of the change in control
              price over the exercise price of the option;

                 after giving the holder an opportunity to exercise any outstanding options, cancel or terminate any unexercised options; or

                provide that any such options or restricted stock will be honored or assumed, or new rights substituted therefore by the new
              employer on a substantially similar basis and in accordance with the terms and conditions of the 2005 Plan.


                                                                             64
                               CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Formation

We were formed on May 31, 2002 by BRS for the purpose of acquiring all of the outstanding stock of MWI Veterinary Supply Co. Prior to that
time, MWI Veterinary Supply Co. was a wholly-owned subsidiary of Agri Beef Co., and BRS was not a stockholder of and was not otherwise
affiliated with either MWI Veterinary Supply Co. or Agri Beef Co. In order to finance our purchase of MWI Veterinary Supply Co. from Agri
Beef Co., in June 2002, BRS and two co-investors purchased an aggregate of 3,982,000 shares of our common stock and 18,852.23 shares of
our Series A preferred stock for an aggregate of $19.6 million. In addition, pursuant to executive stock agreements with members of
management, we issued an aggregate of 522,500 shares of our common stock (including 358,534 shares to our named executive officers) and
an aggregate of 480 shares of our Series A preferred stock (including 329.37 shares to our named executive officers) for $500,000 in cash and
$75,000 in promissory notes. All of the promissory notes were repaid in December 2002. For a description of the executive stock agreements,
see “Management — Executive Stock Agreements.”

In connection with the transactions described above, MWI Veterinary Supply Co. redeemed 517,931 shares of its common stock held by Agri
Beef Co. for $21.0 million and we purchased the remaining 482,069 shares of MWI Veterinary Supply Co. common stock outstanding from
Agri Beef Co. for $19.6 million, 995,500 shares of our common stock and 7,167.77 shares of our Series A preferred stock. Mr. Cleary became
our President and Chief Executive Officer, having previously served as President of MWI Veterinary Supply Co. Mr. Rebholtz, who has served
on our board of directors since June 2002 as the designee of Agri Beef Co., currently controls over 92% of the voting stock of Agri Beef Co. In
addition, Teresa Cleary, the wife of Mr. Cleary, our President and Chief Executive Officer, and Mr. Rebholtz, together with Dorothy Rebholtz,
the mother of Mrs. Cleary and Mr. Rebholtz,Mr. Rebholtz and Teresa Cleary, the wife of Mr. Cleary, our President and Chief Executive
Officer, and various trusts for the benefit of Mrs. Cleary, Mr. Rebholtz and the children of Mrs. Cleary and Mr. Rebholtz, currently control in
the aggregate over 94% of the outstanding stock of Agri Beef Co.

Management Agreement

On June 18, 2002, we entered into a management and consulting services agreement (the “agreement”) with Bruckmann, Rosser, Sherrill & Co.
LLC, or BRS LLC, the general partner of BRS, which at the time was our majority stockholder, and Agri Beef Co. (“Agri Beef”), a major
stockholder. The agreement stated that BRS LLC would provide certain management, consulting and financial planning services to our board
of directors and management. Under the terms of the agreement, BRS LLC received an annual fee equal to the greater of $250,000 or two and
one-half percent of our EBITDA, as defined in the agreement, each fiscal year. The agreement also stipulated that Agri Beef was entitled to
receive approximately 20% of the fee owed to BRS LLC and the amount payable to BRS LLC was reduced by the amount paid to Agri Beef.
BRS LLC received $364,856, $309,010 and $200,000 for services performed under the agreement for the fiscal years ended September 30,
2005, 2004 and 2003, respectively. Agri Beef received $91,214, $77,252 and $50,000 for services performed under the agreement for the fiscal
years ended September 30, 2005, 2004 and 2003, respectively. In August 2005, we, BRS LLC and Agri Beef terminated the agreement in
exchange for a termination fee of $1,600,000 to BRS LLC and $400,000 to Agri Beef. Mr. Bruckmann, a member of our board of directors, is
an officer of BRS LLC. Mr. Cleary, our President and Chief Executive Officer, and Mr. Rebholtz, a member of our board of, are each members
of the board of directors of Agri Beef. Mr. Rebholtz is also the President and Chief Executive Officer of Agri Beef.


                                                                         65
Transition Services Agreement

On June 18, 2002, we entered into a transition services agreement with Agri Beef pursuant to which Agri Beef was to provide specified
services to us. For our fiscal years ended September 30, 2005, 2004 and 2003, we paid Agri Beef $0, $0 and $76,158, respectively, for data
processing expenses. Mr. Cleary, our President and Chief Executive Officer, and Mr. Rebholtz, one of our directors, are each members of the
board of directors of Agri Beef Mr. Rebholtz is also the President and Chief Executive Officer of Agri Beef.

Feeders’ Advantage, L.L.C.

MWI Veterinary Supply Co., our subsidiary, and Agri Beef, hold 50.0% and 4.2%, respectively, of the membership interests in Feeders’
Advantage. We charged Feeders’ Advantage for certain operating and administrative services of $428,227, $420,793 and $390,126 for the
fiscal years ended September 30, 2005, 2004 and 2003, respectively. Sales of products to Feeders’ Advantage were $28.5 million, $22.0
million and $23.0 million for the fiscal years ended September 30, 2005, 2004 and 2003, respectively. Mr. Cleary, our President and Chief
Executive Officer, and Mr. Rebholtz, one of our directors, are each members of the board of managers of Feeders’ Advantage.

We also provide Feeders’ Advantage with a line-of-credit to finance its day-to-day operations. This line-of-credit bears interest at the prime
rate. The interest due on the line-of-credit is calculated and charged to Feeders’ Advantage on the last day of each month. Conversely, to the
extent we have a payable balance due to Feeders’ Advantage, the payable balance accrues interest in favor of Feeders’ Advantage at the
average federal funds rates in effect for that month.


                                                                          66
                                                        PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of June 30, 2006, and as
adjusted to reflect the sale of common stock being offered hereby, by:

                each person, or group of affiliated persons, who is known by us to own more than 5% of our common stock;

                each of our directors and executives;

                all our directors and executives as a group; and

                each selling stockholder offering shares of our common stock in this offering.

The information provided in the table is based on our records, information filed with the Securities and Exchange Commission (“SEC”) and
information provided to us.

Beneficial ownership is determined in accordance with the rules of the SEC. Shares of our common stock subject to options currently
exercisable or exercisable within 60 days of June 30, 2006, are deemed outstanding for calculating the percentage of outstanding shares of the
person holding these options, but are not deemed outstanding for calculating the percentage of any other person. Percentage of beneficial
ownership is based upon 10,626,231 shares of our common stock outstanding as of June 30, 2006 and 869,565 shares of our common stock
outstanding after this offering. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property
laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person’s name.
Except as otherwise indicated, the address of each of the persons in this table is as follows: c/o MWI Veterinary Supply, Inc., 651 S. Stratford
Drive, Suite 100, Meridian, Idaho 83642.

                                                                    Shares Beneficially Owned                           Shares Beneficially
                                                                        Prior to Offering                              Owned After Offering
                                                                               Number of                   Shares
 5% Beneficial Owners, Directors,                                             Underlying                    Being
 Named Officers                                                Number           Options         Percent    Offered     Number         Percent
 Bruckmann, Rosser, Sherrill & Co. II, L.P. (1)
   c/o BRS,L.L.C.
   126 East 56th Street New York,
   New York 10022                                               3,975,620              —          37.4 %   1,739,130    2,236,490       14.5 %
 Agri Beef Co.
   1555 Shoreline Drive, Third Floor Boise,
   Idaho 83702                                                  1,000,000              —           9.4       260,870      739,130        5.9
 Massachusetts Financial Services Company
   500 Boylston Street Boston, (2)
   MA 02116-3741                                                1,003,750              —           9.4            —     1,003,750        8.0
 Bruce C. Bruckmann (3)(4)                                      4,003,477              —          37.7            —     2,264,347       19.6
 Robert N. Rebholtz, Jr. (5)                                    1,003,750              —           9.4            —       742,880        6.5
 James F. Cleary, Jr.                                             197,131          36,264          1.8            —       197,131        1.7
 John F. McNamara                                                  45,222              —             *            —        45,222          *
 Keith E. Alessi                                                   39,178              —             *         9,000       30,178          *
 A. Craig Olson                                                     1,000              —             *            —         1,000          *
 Mary Patricia B. Thompson (6)                                    116,218          36,264          1.1        25,265       90,953          *
 James M. Ross                                                    111,371          36,264          1.0        24,211       87,160          *
 James W. Culpepper                                                83,199          36,264            *        18,087       65,122          *
 Jeffrey J. Danielson                                              71,820          36,264            *        15,613       56,207          *
 John R. Ryan                                                      71,820          36,264            *        12,490       59,330          *
 James S. Hay                                                      60,479          36,264            *        13,148       47,331          *
 Bryan P. Mooney                                                   15,750          12,000            *            —        15,750          *
 All directors and executives as a group (13 persons)           5,820,415         265,848         54.8 %     117,814    3,702,601       30.0 %


footnotes on following page


                                                                                67
*     Represents beneficial ownership of less than one percent.

(1)   Bruckmann, Rosser, Sherrill & Co. LLC, or BRS LLC, is the general partner of Bruckmann, Rosser, Sherrill & Co. II, L.P., or BRS, and by virtue of such status may be
      deemed to be the beneficial owner of the shares held by BRS. Mr. Bruckmann is a member and manager of BRS LLC, and does not individually have the power to
      direct or veto the voting or disposition of shares held by BRS. BRS LLC expressly disclaims beneficial ownership of the shares held by BRS.

(2)   Based on a Schedule 13G filed on February 14, 2006.

(3)   Includes 3,975,620 shares of common stock owned by BRS.

(4)   Mr. Bruckmann may be deemed to share beneficial ownership of the shares held by BRS by virtue of his status as a member and manager of BRS LLC. Mr. Bruckmann
      expressly disclaims beneficial ownership of any shares held by BRS that exceed his pecuniary interest therein. The members and managers of BRS LLC share
      investment and voting power with respect to securities owned by BRS, but no individual controls such investment or voting power.

(5)   Includes 1,000,000 shares of common stock owned by Agri Beef, of which Mr. Rebholtz is a principal stockholder, director, President and Chief Executive Officer.
       Mr. Rebholtz expressly disclaims beneficial ownership of any shares held by Agri Beef that exceed his pecuniary interest therein.

(6)   Includes 666 shares of common stock owned on behalf of Ms. Thompson’s children.



                                                                                     68
                                                    DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 20 million shares of our common stock, $.01 par value, and one million shares of our preferred stock,
$.01 par value, the rights and preferences of which may be established from time to time by our board of directors.

The following description summarizes the terms of our capital stock. Because it is only a summary, it does not contain all the information that
may be important to you. For a complete description you should refer to our amended and restated certificate of incorporation and amended and
restated bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part.

Common Stock

As of June 30, 2006, there were 10,626,231 shares of our common stock outstanding held by 19 stockholders of record. The holders of our
common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Our stockholders do
not have cumulative voting rights in the election of directors. Subject to preferences that may be granted to any outstanding shares of preferred
stock, holders of our common stock are entitled to receive ratably those dividends as may be declared by our board of directors out of funds
legally available therefore, as well as any other distributions made to our stockholders. See “Dividend Policy.” In the event of our liquidation,
dissolution or winding up, holders of our common stock are entitled to share ratably in all of our assets remaining after we pay our liabilities
and distribute the liquidation preference to holders of our outstanding shares of preferred stock. Holders of our common stock have no
preemptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to our common stock.

Preferred Stock

We currently have authorized one million shares of our preferred stock, no shares issued and outstanding at June 30, 2006. Our board of
directors has the authority, without further action by our stockholders, to issue our preferred stock in one or more series and to fix the rights,
preferences, privileges, and restrictions thereof. These rights, preferences, and privileges include dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of
such series, any or all of which may be greater than the rights of our common stock. The issuance of our preferred stock could adversely affect
the voting power of our holders of common stock and the likelihood that such holders will receive dividend payments and payments upon
liquidation. In addition, the issuance of our preferred stock could have the effect of delaying, deferring, or preventing a change in our control.

Registration Rights

Upon the consummation of this offering, the holders of 3,360,359 shares of our common stock will be entitled to certain rights with respect to
the registration of their shares under the Securities Act.

Under a registration rights agreement between us, BRS, Agri Beef and certain other holders of shares of our common stock, BRS and the other
holders may demand that we file a registration statement under the Securities Act covering some or all of such holders’ shares of our common
stock. The registration rights agreement limits the number of “long-form” registration statements (such as Form S-1) BRS may require us to file
to four; however, BRS may require us to file an unlimited number of “short-form” registration statements (such as Form S-3) and Agri Beef
and the other holders may require us to file up to three “short-form” registration statements. In addition, such holders have certain “piggyback”
registration rights. If we propose to register any of our equity securities under the Securities Act other than pursuant to a demand registration or
specified excluded registrations, holders may require us to


                                                                           69
include all or a portion of their registrable securities in the registration. We expect that prior to the consummation of the offering contemplated
by this prospectus each of the holders of registration rights will have waived those rights with respect to the offering contemplated by this
prospectus.

Anti-takeover Effects of Provisions of Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws could have anti-takeover effects.
These provisions are intended to enhance the likelihood of continuity and stability in the composition of our corporate policies formulated by
our board of directors. In addition, these provisions also are intended to ensure that our board of directors will have sufficient time to act in
what our board of directors believes to be in the best interests of us and our stockholders. These provisions also are designed to reduce our
vulnerability to an unsolicited proposal for our takeover that does not contemplate the acquisition of all of our outstanding shares or an
unsolicited proposal for the restructuring or sale of all or part of us. These provisions are also intended to discourage certain tactics that may be
used in proxy fights. However, these provisions could delay or frustrate the removal of incumbent directors or the assumption of control of us
by the holder of a large block of common stock, and could also discourage or make more difficult a merger, tender offer, or proxy contest, even
if such event would be favorable to the interest of our stockholders.

Written Consent of Stockholders. Our amended and restated certificate of incorporation and amended and restated bylaws provide that any
action required or permitted to be taken by our stockholders must be taken at a duly called meeting of stockholders and not by written consent.
Elimination of actions by written consent of stockholders may lengthen the amount of time required to take stockholder actions because actions
by written consent are not subject to the minimum notice requirement of a stockholders’ meeting. The elimination of actions by written consent
of the stockholders may deter hostile takeover attempts. Without the availability of actions by written consent of the stockholders, a holder
controlling a majority of our capital stock would not be able to amend our amended and restated bylaws without holding a stockholders
meeting. To hold such a meeting, the holder would have to obtain the consent of a majority of the board of directors, the chairman of the board
or the president to call a stockholders’ meeting and satisfy the applicable notice provisions set forth in our amended and restated bylaws.

Amendment of the Bylaws. Under Delaware law, the power to adopt, amend or repeal a corporation’s bylaws is conferred upon the
stockholders. A corporation may, however, in its certificate of incorporation also confer upon the board of directors the power to adopt, amend
or repeal its bylaws. Our amended and restated certificate of incorporation and amended and restated bylaws grant our board the power to alter,
amend and repeal our bylaws, or adopt new bylaws, on the affirmative vote of a majority of the directors then in office. Our stockholders may
alter, amend or repeal our bylaws, or adopt new bylaws, but only at a regular or special meeting of stockholders by an affirmative vote of not
less than 66 2  3 % in voting power of all outstanding shares of our capital stock entitled to vote generally in the election of directors.

Amendment of Certificate of Incorporation. The provisions of our amended and restated certificate of incorporation that could have
anti-takeover effects as described above are subject to amendment, alteration or repeal either by (i) our board of directors without the assent or
vote of our stockholders or (ii) the affirmative vote of not less than 66 2  3 % in voting power of all outstanding shares of our capital stock
entitled to vote generally in the election of directors, depending on the subject provision. This requirement makes it more difficult for
stockholders to make changes to the provisions in our amended and restated certificate of incorporation which could have anti-takeover effects
by allowing the holders of a minority of the voting securities to prevent the holders of a majority of voting securities from amending these
provisions.


                                                                            70
Special Meetings of Stockholders. Our amended and restated bylaws preclude our stockholders from calling special meetings of stockholders
or requiring the board of directors or any officer to call such a meeting or from proposing business at such a meeting except as required by law.
Our amended and restated bylaws provide that only a majority of our board of directors, the chairman of the board or the president can call a
special meeting of stockholders. Because our stockholders do not have the right to call a special meeting, a stockholder cannot force
stockholder consideration of a proposal over the opposition of the board of directors by calling a special meeting of stockholders prior to the
time a majority of the board of directors, the chairman of the board or the president believes the matter should be considered or until the next
annual meeting, provided that the requesting stockholder met the applicable notice requirements. The restriction on the ability of stockholders
to call a special meeting means that a proposal to replace board members also can be delayed until the next annual meeting.

Preferred Stock. The issuance of our preferred stock may have the effect of delaying, deferring or preventing a change in control of us
without further action by the holders and may adversely affect voting and other rights of holders of our common stock. In addition, issuance of
preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could make it more
difficult for a third party to acquire a majority of the outstanding shares of voting stock. At present, we have no plans to issue any shares of
preferred stock.

Other Limitations on Stockholder Actions. Advance notice is required for stockholders to nominate directors or to submit proposals for
consideration at meetings of stockholders. This provision may have the effect of precluding the conduct of certain business at a meeting if the
proper notice is not provided and may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the
acquirer’s own slate of directors or otherwise attempting to obtain control of us. In addition, the ability of our stockholders to remove directors
without cause is precluded.

Nasdaq National Market Listing

Our common stock is listed on the Nasdaq National Market under the symbol “MWIV.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Wells Fargo Shareowner Services. Its address is MAC N9100-030, 161 North
Concord Exchange, South St. Paul, MN 55075-1139 and its telephone number is (651) 450-4061.


                                                                           71
                                                               UNDERWRITING

We and the selling stockholders are offering the shares of common stock described in this prospectus through a number of underwriters. Piper
Jaffray & Co., Banc of America Securities LLC and William Blair & Company, L.L.C. are the representatives of the underwriters. We and the
selling stockholders have entered into a firm commitment underwriting agreement with the representatives. Subject to the terms and conditions
of the underwriting agreement, we and the selling stockholders have agreed to sell to the underwriters, and each underwriter has agreed to
purchase, the number of shares of common stock listed next to its name in the following table:

                     Underwriter                                                                    Number of Shares
                     Piper Jaffray & Co.
                     Banc of America Securities LLC.
                     William Blair & Company, L.L.C.
                     Total


The underwriting agreement is subject to a number of terms and conditions and provides that the underwriters must buy all of the shares if they
buy any of them. The underwriters will sell the shares to the public when and if the underwriters buy the shares from us and the selling
stockholders.

The underwriters initially will offer the shares to the public at the price specified on the cover page of this prospectus. The underwriters may
allow a concession of not more than $        per share to selected dealers. If all the shares are not sold at the public offering price, the
underwriters may change the public offering price and the other selling terms. The common stock is offered subject to a number of conditions,
including:

                receipt and acceptance of the common stock by the underwriters; and

                the underwriters’ right to reject orders in whole or in part.

Over-Allotment Option. We and the selling stockholders have granted the underwriters an over-allotment option to buy up to 440,106
additional shares of our common stock on a pro rata basis at the same price per share as they are paying for the shares shown in the table above.
These additional shares would cover sales of shares by the underwriters that exceed the total number of shares shown in the table above. The
underwriters may exercise this option at any time within 30 days after the date of this prospectus. To the extent that the underwriters exercise
this option, each underwriter will purchase additional shares from us and the selling stockholders in approximately the same proportion as it
purchased the shares shown in the table above. If purchased, the additional shares will be sold by the underwriters on the same terms as those
on which the other shares are sold. We will pay the expenses associated with the exercise of this option.

Discount and Commissions. The following table shows the per share and total underwriting discounts and commissions to be paid to the
underwriters by us and the selling stockholders. These amounts are shown assuming no exercise and full exercise of the underwriters’ option to
purchase additional shares.

                                                      Paid by Us                               Paid by the Selling Stockholders
                                        No Exercise            Full Exercise               No Exercise                 Full Exercise
 Per share                               $                       $                         $                            $
   Total                                 $                       $                         $                            $



We estimate that the expenses of the offering to be paid by us, not including underwriting discounts and commissions, will be approximately
$695,391.


                                                                            72
Listing.       Our common stock is quoted on the Nasdaq National Market under the symbol “MWIV.”

Stabilization. In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price
of our common stock, including:

                   stabilizing transactions;

                   short sales;

                   syndicate covering transactions; and

                   purchases to cover positions created by short sales.

Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our
common stock while this offering is in progress. Stabilizing transactions may include making short sales of our common stock, which involves
the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering, and purchasing
shares of common stock from us or on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which
are short positions in an amount not greater than the underwriters’ over-allotment option referred to above, or may be “naked” shorts, which are
short positions in excess of that amount. Syndicate covering transactions involve purchases of our common stock in the open market after the
distribution has been completed in order to cover syndicate short positions.

The underwriters may close out any covered short position either by exercising their over-allotment option, in whole or in part, or by
purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares
available for purchase in the open market compared to the price at which the underwriters may purchase shares through the over-allotment
option.

A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the
common stock in the open market that could adversely affect investors who purchased in this offering. To the extent that the underwriters
create a naked short position, they will purchase shares in the open market to cover the position.

The representatives also may impose a penalty bid on underwriters and dealers participating in the offering. This means that the representative
may reclaim from any syndicate members or other dealers participating in the offering the underwriting discount on shares sold by them and
purchased by the representative in stabilizing or short covering transactions.

In addition, one or more selling stockholders may have covered short positions in respect of the shares hereof sold by them in this offering that
will become uncovered as a result of the sale. After the distribution has been completed, they may close out their positions through purchases
of the common stock in the open market.

These activities may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the
market price of our common stock. As a result of these activities, the price of our common stock may be higher than the price that otherwise
might exist in the open market. If the underwriters commence the activities, they may discontinue them at any time. The underwriters may
carry out these transactions on the Nasdaq National Market, in the over-the-counter market or otherwise.


                                                                           73
Market Making. In connection with this offering, some underwriters and any selling group members who are qualified market makers on the
Nasdaq National Market may engage in passive market making transactions in our common stock on the Nasdaq National Market. Passive
market making is allowed during the period when the SEC’s rules would otherwise prohibit market activity by the underwriters and dealers
who are participating in this offering. Passive market making may occur during the business day before the pricing of this offering, before the
commencement of offers or sales of the common stock. A passive market maker must comply with applicable volume and price limitations and
must be identified as a passive market maker. In general, a passive market maker must display its bid at a price not in excess of the highest
independent bid for our common stock; but if all independent bids are lowered below the passive market maker’s bid, the passive market maker
must also lower its bid once it exceeds specified purchase limits. Net purchases by a passive market maker on each day are limited to a
specified percentage of the passive market maker’s average daily trading volume in our common stock during the specified period and must be
discontinued when that limit is reached. Passive market making may cause the price of our common stock to be higher than the price that
otherwise would exist in the open market in the absence of those transactions. The underwriters and dealers are not required to engage in
passive market making and may end passive market making activities at any time.

The underwriters have informed us that they do not expect to make sales to accounts over which they exercise discretionary authority in excess
of 5.0% of the shares of common stock being offered.

Lock-up Agreements. We, our directors and named executive officers and the selling stockholders have entered into lock-up agreements with
the underwriters. Under these agreements, subject to exceptions, we may not issue any new shares of common stock, and those holders of stock
may not, directly or indirectly, offer, sell, contract to sell, pledge or otherwise dispose of or hedge any common stock or securities convertible
into or exchangeable for shares of common stock, or publicly announce the intention to do any of the foregoing, without the prior written
consent of the representatives for a period of 90 days from the date of this prospectus. This consent may be given at any time without public
notice. In addition, during this 90 day period, we have also agreed not to file any registration statement for, and each of our officers and
stockholders has agreed not to make any demand for, or exercise any right of, the registration of, any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock without the prior written consent of the representatives.

Notwithstanding the foregoing, if the 90th day after the date of this prospectus occurs within 17 days following an earnings release by us or the
occurrence of material news or a material event related to us, or if we intend to issue an earnings release within 16 days following the 90th day,
the 90-day period will be extended to the 18th day following such earnings release or the occurrence of the material news or material event
unless such extension is waived by the underwriters.

Indemnification. We and the selling stockholders will indemnify the underwriters against some liabilities, including liabilities under the
Securities Act. If we are unable to provide this indemnification, we will contribute to payments the underwriters may be required to make in
respect of those liabilities.

Online Offering. A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters
participating in this offering. Other than the prospectus in electronic format, the information on any such web site, or accessible through any
such web site, is not part of the prospectus. The representative may agree to allocate a number of shares to underwriters for sale to their online
brokerage account holders. Internet distributions will be allocated by the underwriters that will make internet distributions on the same basis as
other allocations. In addition, shares may be sold by the underwriters to securities dealers who resell shares to online brokerage account
holders.

Conflicts/Affiliates. The underwriters and their affiliates may in the future provide various investment banking, commercial banking and
other financial services for us and our affiliates for which services they


                                                                           74
have received, and may in the future receive, customary fees. Bank of America, N.A., the agent and a lender under our amended credit
agreement, is an affiliate of Banc of America Securities LLC.

Because more than 10% of the net proceeds of this offering, not including underwriting compensation, may be received by affiliates of Banc of
America Securities LLC, a member of the National Association of Securities Dealers, Inc. (“NASD”), when we repay a portion of our
borrowings under our revolving credit facility under our amended credit agreement, this offering is being conducted in compliance with NASD
Conduct Rule 2710(h). Pursuant to that rule, the appointment of a qualified independent underwriter is not necessary in connection with this
offering, as the offering is of a class of equity securities for which a “bona fide independent market,” as defined by the NASD, exists.


                                                                        75
                                                              LEGAL MATTERS
The validity of our common stock offered hereby will be passed on for us by Dechert LLP, Philadelphia, Pennsylvania. Certain legal matters in
connection with this offering will be passed on for the underwriters by Shearman & Sterling LLP, New York, New York.
                                                                   EXPERTS
The consolidated financial statements included in this prospectus and the related consolidated financial statement schedule included elsewhere
in the registration statement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their
report appearing herein (which report expresses an unqualified opinion on the consolidated financial statements and consolidated financial
statement schedule and includes an explanatory paragraph regarding the adoption of Statement of Financial Accounting Standards No. 150,
Accounting For Certain Financial Instruments with Characteristics of Both Liabilities and Equity ), and have been so included in reliance upon
the report of such firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods ended March 31, 2006 and 2005 which is included in this
prospectus, Deloitte & Touche LLP, an independent registered public accounting firm, have applied limited procedures in accordance with the
standards of the Public Company Accounting Oversight Board (United States) for a review of such information. However, as stated in their
report herein, they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on
their report on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP are
not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited interim financial information
because that report is not a “report” or a “part” of the registration statement prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Act.
                                            WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information and periodic reporting requirements of the Exchange Act, and, in accordance with such requirements, file
periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information are
available for inspection and copying at the public room. You can read these periodic reports maintained by the SEC at 100 F Street, NE,
Room 1580, Washington, D.C. 20549. You may also obtain copies of the documents from those offices upon payment of the prescribed fees.
You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. You may also request copies
of the documents upon payment of a duplicating fee, by writing to the SEC. In addition, the SEC maintains a web site that contains reports and
other information regarding registrants (including us) that file electronically with the SEC, which you can access at http://www.sec.gov.
This prospectus is part of a registration statement on Form S-1 that we have filed with the SEC, covering the common stock we and the selling
stockholders are offering. As permitted by the rules and regulations of the SEC, this prospectus omits certain information contained in the
registration statement. For further information with respect to us and our common stock, you should refer to the registration statement and to its
exhibits. Statements contained in this prospectus regarding the contents of any agreement or other document that is filed as an exhibit to the
registration statement are not necessarily complete. You should refer in each instance to the copy of the agreement filed or incorporated by
reference as an exhibit to the registration statement, each such statement being qualified in all respects by the document to which it refers.
In addition, you may request copies of this filing and such other reports as we may determine or as the law requires at no cost, by telephone at
(800) 824-3703, or by mail to MWI Veterinary Supply, Inc., 651 S. Stratford Road, Suite 100, Meridian, Idaho 83642, Attention: Investor
Relations.


                                                                           76
                            MWI VETERINARY SUPPLY, INC.
 INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE


                                                                                     Page
                                                                                    Number
Report of Independent Registered Public Accounting Firm                                F-2
Consolidated Statements of Income for the years ended September 30, 2005, 2004
  and 2003                                                                             F-3
Consolidated Statements of Comprehensive Income for the years ended
  September 30, 2005, 2004 and 2003                                                    F-4
Consolidated Balance Sheets as of September 30, 2005 and 2004                          F-5
Consolidated Statements of Stockholders’ Equity for the years ended September 30,
  2005, 2004 and 2003                                                                  F-6
Consolidated Statements of Cash Flows for the years ended September 30, 2005,
  2004 and 2003                                                                        F-7
Notes to Consolidated Financial Statements                                             F-8
Report of Independent Registered Public Accounting Firm                               F-24
Condensed Consolidated Statements of Income for the three and six-months ended
  March 31, 2006 and 2005                                                             F-25
Condensed Consolidated Statements of Comprehensive Income for the three and
  six-months ended March 31, 2006 and 2005                                            F-26
Condensed Consolidated Balance Sheet as of March 31, 2006                             F-27
Condensed Consolidated Statements of Cash Flows for the six-months ended
  March 31, 2006 and 2005                                                             F-28
Notes to Condensed Consolidated Financial Statements                                  F-29
Schedule II — Consolidated Valuation And Qualifying Accounts                          F-35
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
MWI Veterinary Supply, Inc.:

We have audited the accompanying consolidated balance sheets of MWI Veterinary Supply, Inc. and subsidiaries (the “Company”) as of
September 30, 2005 and 2004, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows
for each of the three years in the period ended September 30, 2005. Our audits also included the consolidated financial statement schedule
listed in the Index at F-1. These financial statements and financial statement schedule are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of MWI Veterinary
Supply, Inc. and subsidiaries as of September 30, 2005 and 2004, and the results of their operations and their cash flows for each of the three
years in the period ended September 30, 2005, in conformity with accounting principles generally accepted in the United States of America.
Also, in our opinion, such consolidated financial statement schedule, when considered in relation to the consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 2, the Company adopted the provisions of Statement of Financial Accounting Standards No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity , effective July 1, 2003.

 DELOITTE & TOUCHE LLP
  Boise, Idaho
November 22, 2005



                                                                         F- 2
                                      MWI VETERINARY SUPPLY, INC.
                                CONSOLIDATED STATEMENTS OF INCOME
                             For the Years Ended September 30, 2005, 2004 and 2003
                            Dollars and shares in thousands, except per share amounts


                                                                              2005            2004            2003
Revenues:
  Product sales                                                           $ 463,272       $ 367,863       $ 315,738
  Product sales to related party                                             28,473          22,163          22,960
  Commissions                                                                 4,910           4,256           3,011
     Total revenues                                                         496,655         394,282         341,709
Cost of product sales                                                       426,709         338,684         294,692
Gross profit                                                                 69,946          55,598          47,017
Selling, general and administrative expenses                                 52,647          41,872          35,886
Depreciation and amortization                                                 1,528           1,146             976
Operating income                                                             15,771          12,580          10,155
Other income (expense):
  Interest expense                                                             (6,515 )        (6,098 )        (3,034 )
  Earnings of equity method investees                                             131             104             106
  Other                                                                           268             218             218
        Total other expense                                                    (6,116 )        (5,776 )        (2,710 )
Income before taxes                                                             9,655           6,804           7,445
Income tax expense                                                             (5,098 )        (4,280 )        (3,116 )
Net income                                                                      4,557           2,524           4,329
Redeemable preferred stock accretion                                               —               —           (2,714 )
Income available to common stockholders                                   $     4,557     $     2,524     $     1,615
Earnings per common share:
  Basic                                                                   $      0.76     $      0.50     $      0.32
  Diluted                                                                 $      0.68     $      0.43     $      0.28
Weighted average common shares outstanding:
  Basic                                                                         5,970           5,038           5,013
  Diluted                                                                       6,697           5,878           5,745


                                    See notes to consolidated financial statements


                                                           F- 3
                                   MWI VETERINARY SUPPLY, INC.
                     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                          For the Years Ended September 30, 2005, 2004 and 2003
                                           Dollars in thousands


                                                                                       2005      2004        2003
Net income                                                                            $ 4,557   $ 2,524     $ 4,329
Other comprehensive loss:
  Interest rate swap:
     Change in fair value, net of tax of $0, $9 and $6, respectively                       —        (14 )        (9 )
     Amount reclassified into net income, net of tax of $9, $6 and $42                     14         9          67
       Total comprehensive income                                                     $ 4,571   $ 2,519     $ 4,387


                                    See notes to consolidated financial statements.


                                                            F- 4
                                      MWI VETERINARY SUPPLY, INC.
                                     CONSOLIDATED BALANCE SHEETS
                                       As of September 30, 2005 and 2004
                            Dollars and shares in thousands, except per share amounts


                                                                                         2005          2004
Assets
Current Assets:
   Cash                                                                              $      31     $      28
   Receivables, net                                                                     77,099        59,720
   Inventories                                                                          68,786        49,525
   Prepaid expenses and other current assets                                             2,011         1,196
   Deferred income taxes                                                                   482           244
     Total current assets                                                              148,409       110,713
Property and equipment, net                                                              6,919         6,007
Goodwill                                                                                29,739        28,287
Intangibles, net                                                                         1,644            —
Other assets, net                                                                        1,533         1,558
Total assets                                                                         $ 188,244     $ 146,565
Liabilities And Stockholders’ Equity
Current Liabilities:
  Line-of-credit                                                                     $    24,690   $    49,129
  Accounts payable                                                                        69,382        50,966
  Accrued expenses                                                                         6,341         4,454
  Interest rate swap                                                                          —             23
  Current maturities of long-term debt                                                        97           288
Total current liabilities                                                                100,510       104,860
Deferred income taxes                                                                        650           608
Long-term debt                                                                               390           732
Redeemable preferred stock                                                                    —         35,733
Commitments and contingencies
Stockholders’ Equity
  Common stock $0.01 par value, 20,000 authorized; 10,576 and 5,560 shares issued
     and outstanding, respectively                                                         106            56
  Additional paid in capital                                                            78,396           955
  Accumulated other comprehensive income (loss)                                             —            (14 )
  Retained earnings                                                                      8,192         3,635
     Total stockholders’ equity                                                         86,694         4,632
Total liabilities and stockholders’ equity                                           $ 188,244     $ 146,565



                                    See notes to consolidated financial statements


                                                           F- 5
                                                   MWI VETERINARY SUPPLY, INC.
                                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
                                          For the Years Ended September 30, 2005, 2004 and 2003
                                                     Dollars and shares in thousands


                                                                                            Notes         Accumulated
                                            Shares of                   Additional       Receivable          Other
                                            Common         Common         Paid In           From         Comprehensive     Retained
                                             Stock          Stock         Capital       Stockholders     Income/(Loss)     Earnings           Total
Balance at September 30, 2002                  5,500        $ 55        $       945       $     (76 )      $       (67 )   $    (504 )    $       353
Net income                                                      —                —               —                  —         4,329             4,329
Issuance of common stock                          60             1               10              —                  —             —                11
Interest earned on notes receivable                             —                —                (1 )              —             —                 (1 )
Collection of notes receivable                                  —                —               77                 —             —                77
Other comprehensive income                                      —                —               —                  58            —                58
Accretion of dividends on
   redeemable preferred stock                                   —               —                —                  —          (2,714 )        (2,714 )
Balance at September 30, 2003                  5,560            56             955               —                  (9 )        1,111           2,113
Net income                                                      —               —                —                  —           2,524           2,524
Other comprehensive loss                                        —               —                —                  (5 )           —               (5 )
Balance at September 30, 2004                  5,560            56             955               —                 (14 )        3,635           4,632
Net income                                                      —               —                —                  —           4,557           4,557
Issuance of common stock, net of issuance
   costs of $7,558                             4,983            50           77,109              —                 —              —            77,159
Exercises of common stock options                 33            —                30              —                 —              —                30
Tax benefit of common stock
   exercises                                                    —              302               —                 —               —          302
Other comprehensive income                                      —                —               —                 14              —            14
Balance at September 30, 2005                 10,576         $ 106       $   78,396       $      —         $       —       $    8,192     $ 86,694



                                                        See notes to consolidated financial statements


                                                                                F- 6
                                         MWI VETERINARY SUPPLY, INC.
                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                For the Years Ended September 30, 2005, 2004 and 2003
                                                 Dollars in thousands


                                                                                    2005               2004            2003
Cash Flows From Operating Activities:
  Net income                                                                    $        4,557     $     2,524     $    4,329
  Adjustments to reconcile net income to net cash provided
    by/(used in) operating activities:
    Accretion of redeemable preferred stock                                             4,055            4,239            999
    Depreciation and amortization                                                       1,536            1,146            976
    Amortization of debt issuance costs                                                   140              140            140
    Deferred income taxes                                                                (205 )            335             13
    Earnings of equity method investees                                                  (131 )           (105 )         (106 )
    Distribution from equity method investee                                               43               —              50
    Gain on disposal of property and equipment                                             (6 )             (8 )           (3 )
    Changes in operating assets and liabilities (net of effects of
       acquisitions):
       Receivables                                                                  (15,276 )          (10,071 )       (8,536 )
       Inventories                                                                  (17,334 )          (12,668 )        1,555
       Prepaid expenses and other current assets                                       (714 )             (359 )         (415 )
       Accounts payable                                                              15,837                653          9,459
       Accrued expenses                                                               1,887                285            320
         Net cash (used in)/provided by operating activities                         (5,611 )          (13,889 )        8,781
Cash Flows From Investing Activities:
    Business acquisitions                                                               (5,033 )            —              —
    Purchases of property and equipment                                                 (2,022 )        (1,254 )       (1,321 )
    Sale of property and equipment                                                         564              13             14
    Purchase of investments                                                                 —              (10 )           —
    Other                                                                                  (38 )            —              —
         Net cash used in investing activities                                          (6,529 )        (1,251 )       (1,307 )
Cash Flows From Financing Activities:
    Issuance of common stock, net of issuance costs                                 77,159                  —          11
    Tax benefit of common stock options                                                302                  —          —
    Proceeds from stock options                                                         30                  —          —
    Proceeds from issuance of debt                                                     836                 208         —
    Issuance of preferred stock                                                         —                   —         286
    Collection of notes receivable                                                      —                   —          76
    Redemption of preferred stock and accrued dividends                            (39,789 )                —          —
    Net (payments) borrowings on line-of-credit                                    (24,439 )            15,157     (7,747 )
    Payment on debt                                                                 (1,856 )              (133 )       —
    Debt issuance costs                                                               (100 )              (100 )     (100 )
         Net cash provided by/(used in) financing activities                        12,143              15,132     (7,474 )
Increase (Decrease) in Cash                                                              3                  (8 )       —
Cash at Beginning of Period                                                             28                  36         36
Cash at End of Period                                                            $      31         $        28   $     36



                                       See notes to consolidated financial statements


                                                                F- 7
                                                MWI VETERINARY SUPPLY, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                        Dollars in thousands, except share and per share data


1.   Business Description and Basis of Presentation

MWI Veterinary Supply, Inc. is a leading distributor of animal health products to veterinarians across the United States. The Company markets
its products to veterinarians in both the companion and production animal markets. MWI Veterinary Supply, Inc. operates ten distribution
centers located in the Western United States, Texas, Michigan, Georgia and Pennsylvania. The Company also provides supplies to Feeders’
Advantage, L.L.C. (“Feeders Advantage”), a 50% owned entity that sells to various feedlot companies.

MWI Veterinary Supply, Inc. (formerly named MWI Holdings, Inc.) was formed on June 18, 2002 for the sole purpose of acquiring all of the
outstanding stock of MWI Veterinary Supply Co. (“MWI Co.”) from its owner, Agri Beef Co. (“Agri Beef”). The significant aspects of this
transaction follow:

             517,931 shares of MWI Co. stock held by Agri Beef were redeemed for cash of $21,033.

             MWI Co. obtained a line-of-credit (See Note 7) and used the proceeds to repay existing debt held by Agri Beef and redeem
             shares held by Agri Beef as discussed above.

             MWI Veterinary Supply, Inc. issued 3,982,000 shares of its common stock and 18,852.23 shares of redeemable preferred stock
             to a new investor for total cash proceeds of $19,576.

             MWI Veterinary Supply, Inc. acquired the remaining 482,069 shares of MWI Co. from Agri Beef for cash of $19,576 and
             995,500 shares of MWI Veterinary Supply, Inc. common stock and 7,167.77 shares of MWI Veterinary Supply, Inc. redeemable
             preferred stock with a collective value of $7,349.

             MWI Veterinary Supply, Inc. issued 522,500 shares of its common stock and 480 shares of its redeemable preferred stock to
             employees for cash of $500 and notes receivable of $75.

             MWI Veterinary Supply, Inc. and MWI Co. incurred capitalizable transaction costs of $2,277 recognized as part of purchase
             price.

The acquisition of MWI Co. by MWI Veterinary Supply, Inc. was accounted for in accordance with the provisions of Statement of Financial
Accounting Standards (“SFAS”) No. 141, Business Combinations . Accordingly, MWI Co.’s assets and liabilities were adjusted to fair value
based on the purchase price paid by MWI Veterinary Supply, Inc. The principal effects of these adjustments were an increase to property and
equipment of $590, an increase to investments of $232 and the recording of goodwill of $28,615. During 2003, the Company resolved a
preacquisition contingency related to tax liabilities resulting in a reduction of goodwill of $328.

2.   Summary of Significant Accounting Policies

Principles of Consolidation — The accompanying consolidated financial statements consist of MWI Veterinary Supply, Inc. and its wholly
owned subsidiaries, collectively referred to herein as “the Company” or “MWI”. All significant intercompany transactions have been
eliminated. The Company


                                                                       F- 8
uses the equity method of accounting for its investments in entities in which it has significant influence; generally this represents an ownership
interest between 20% and 50%. The Company’s share of income or loss from these investments is reported as increases or decreases in the
respective investment with a corresponding amount reported as other income.

Basis of Accounting and Use of Estimates — The accompanying consolidated financial statements have been prepared on the accrual basis of
accounting using accounting principles generally accepted in the United States. In preparing financial information, the Company uses certain
estimates and assumptions that may affect the reported amounts and disclosures. Some of these estimates require difficult, subjective, and
complex judgments about matters that are inherently uncertain. As a result, actual results could differ from these estimates. Estimates are used
when accounting for sales returns, allowance for doubtful accounts, customer incentives, vendor rebates, inventories, goodwill and intangible
assets, income taxes, impairment of long-lived assets, depreciation and amortization, employee benefits, unearned income and contingencies.
The estimates of fair value of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date and
reported amounts of revenue and expenses for the periods are based on assumptions that the Company believes to be reasonable.

Segment Information — The Company is a distributor of animal health products to veterinarians. These operations are within a single reporting
segment and are located within the United States.

Revenue Recognition — MWI sells products that it sources from vendors to its customers through either a “buy/sell” transaction or an agency
relationship with its vendors. In a “buy/sell” transaction, MWI purchases or takes inventory of products from the vendor. When a customer
places an order with MWI, the Company picks, packs, ships and invoices the customer for the order. MWI recognizes revenue from “buy/sell”
transactions as product sales when the product is delivered to the customer. The Company accepts product returns from its customers. The
Company estimates returns based on historical experience and recognizes these estimated returns as a reduction of product sales. Product
returns have not been significant to the Company’s financial statements. In an agency relationship, MWI does not purchase and take inventory
of products from its vendors. MWI receives an order from a customer, then transmits the order to the vendor, who picks, packs and ships the
order to the customer. In some cases, the vendor invoices and collects payment from the customer, while in other cases MWI invoices and
collects payment from the customer on behalf of the vendor. MWI receives a commission payment for soliciting the order from the customer
and for providing other customer service activities. Commissions are recognized when the services upon which the commissions are based are
complete. Gross billings from agency contracts were $102,883, $86,657 and $68,697 for the years ended September 30, 2005, 2004 and 2003,
respectively, and generated commission revenue of $4,910, $4,256 and $3,011, respectively.

Cost of Product Sales and Vendor Rebates — Cost of product sales includes the Company’s inventory product cost; including shipping costs to
and from its distribution centers. Vendor rebates are recorded based on the terms of the contracts or programs with each vendor. The Company
primarily receives quarterly and annual performance-based rebates from third-party vendors based upon attainment of certain sales and/or
purchase goals. Sales rebates are classified in the accompanying consolidated statements of income as a reduction to cost of product sales at the
time the sales performance measures are achieved. Purchase rebates are measured against inventory purchases from the vendors and are
classified as a reduction of inventory until the product is sold. When the inventory is sold and purchase measures are achieved, purchase rebates
are recognized as a reduction to cost of product sales.

Customer Incentives — Customer incentives are accrued based on the terms of the contracts with each customer . These incentive programs
provide that the customer receive an incentive based on their product purchases or attainment of performance goals. Incentives are estimated
based on the specific terms in each agreement, historical experience and product growth rates.


                                                                          F- 9
Cash — For the purposes of the statements of cash flows, cash consists of cash on hand. The Company’s banking arrangements allow the
Company to fund outstanding checks when presented to the financial institution for payment. This cash management practice frequently results
in a net cash book overdraft position, which occurs when total issued checks exceed available cash balances at a single financial institution. The
Company has recorded its cash disbursement accounts with a net cash book overdraft position in accounts payable. At September 30, 2005 and
2004, the Company had net cash book overdrafts of $9,581 and $239, respectively, classified in accounts payable.

Inventories — Inventories, consisting of pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, supplies and nutritional
products, are stated at the lower of cost (on a moving-average basis) or market.

Property and Equipment — Property and equipment are stated at cost and depreciation is computed using the straight-line method over the
estimated useful lives of the related assets as follows:

                        Buildings                                                                               25 years
                        Machinery, furniture and equipment                                                  5 to 7 years
                        Computer equipment                                                                  3 to 5 years
                        Leasehold improvements                                                  Shorter of useful life or
                                                                                                      life of lease term


The cost and accumulated depreciation of items sold or retired are removed from the property accounts and any resulting gain or loss is
reflected in net income. Repairs and maintenance are expensed as incurred and renewals and improvements are capitalized.

The Company periodically reviews long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows from an asset is less than the carrying value of
the asset, an asset impairment must be recognized in the financial statements by writing down the asset to its fair value.

Goodwill — The Company recognizes the excess purchase price over the fair value of net assets acquired and liabilities assumed in a business
combination as goodwill on the consolidated balance sheet. Goodwill is not amortized, but instead tested for impairment at least annually. The
Company performs an annual impairment test as of September 30 each year and concluded that goodwill was not impaired at September 30,
2005 and 2004. Goodwill impairment tests will continue to be performed at least annually, and more frequently if circumstances indicate a
possible impairment. The following table summarizes the goodwill recognized in connection with each business combination.

                                                                                                  2005           2004
                       MWI Veterinary Supply Co.                                                $ 28,287       $ 28,287
                       Memorial Pet Care, Inc.                                                         66             —
                       Vetpo Distributors, Inc.                                                     1,386             —
                                                                                                $ 29,739       $ 28,287


Other Assets — Included in other assets are investments that consist of the Company’s equity method investment in one entity and two entities
accounted for under the cost method of accounting. Other assets also consist of debt issuance costs that are being amortized over the life of the
related debt.

Earnings Per Share — Basic earnings per share is calculated based on the weighted-average number of outstanding common shares during the
applicable period. Diluted earnings per share is based on the weighted-average number of outstanding common shares plus the
weighted-average number of potential


                                                                         F- 10
outstanding common shares. Potential common shares that would increase earnings per share amounts or decrease loss per share amounts are
antidilutive and are, therefore, excluded from the earnings per share computations. Earnings per share is computed separately for each period
presented.

Income Taxes — Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized to provide for
temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred taxes are measured using enacted tax rates
in effect during the years in which the temporary differences are expected to reverse.

Concentrations of Risk — The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of its
receivables. Customers of the Company are geographically dispersed throughout the United States. The Company routinely assesses the
financial strength of its customers and reviews their credit history before extending credit. In addition, the Company establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

Product sales to one customer were approximately 10% of the Company’s total product sales in 2005, 2004 and 2003, respectively. Product
sales to another customer, a related party (See Note 14), were approximately 6%, 6% and 7% of the Company’s total product sales in 2005,
2004 and 2003, respectively.

Comprehensive Income — Components of the Company’s comprehensive income include net income and changes in fair value of interest rate
swaps.

Advertising — Advertising costs are expensed when incurred and are included as part of selling, general and administrative expenses.
Advertising costs were $142, $413, and $409 in 2005, 2004 and 2003, respectively.

Derivative Financial Instruments — The Company records all derivatives at fair value and designates derivative instruments as being used to
hedge changes in fair value or changes in cash flows. Changes in the fair value of derivatives that offset changes in cash flows of a hedged item
are recorded initially in other comprehensive income. Amounts recorded in other comprehensive income are subsequently reclassified into
earnings during the same period in which the hedged item affects earnings. Any portion of the changes in fair value of derivatives designated as
a hedge that is deemed ineffective is recorded in earnings. The Company entered into interest rate swap agreements to manage its interest rate
exposure (See Note 7). Interest rate swaps are agreements to exchange interest rate payment streams based on a notional principal amount. The
Company designated the swaps as a cash flow hedge. Accordingly, these swap agreements resulted in the recognition of derivative liabilities as
well as amounts recorded in other comprehensive income. The Company had no interest rate swaps at September 30, 2005.

Stock-Based Compensation — The Company accounts for stock-based awards to employees using the intrinsic value method in accordance
with Accounting Principles Bulletin (“APB”) No. 25, Accounting for Stock Issued to Employees . The Company has adopted the
disclosure-only requirements of SFAS No. 123, Accounting for Stock-Based Compensation , for stock-based awards to employees.
Accordingly, the Company records no compensation expense in the consolidated financial statements upon grant of employee stock awards
when the exercise price is equal to fair market value at the date of grant.

SFAS 123 requires the disclosure of pro forma net income or loss as if the Company had adopted the fair value method since inception. Under
SFAS 123, the fair value of stock-based awards to employees is calculated through the use of option pricing models, even though such models
were developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which significantly


                                                                         F- 11
differ from the characteristics of the Company’s stock option awards. These models also require subjective assumptions, including expected
time to exercise, which greatly affect the calculation. The following table summarizes the effect on net income and earnings per share if the
Company had adopted the provisions of SFAS 123.

                                                                                              2005           2004          2003
                 Net income                                                                  $ 4,557        $ 2,524       $ 4,329
                 Deduct: Stock-based employee compensation expense determined
                   under fair-value-based method for all awards, net of related tax
                   effects                                                                        (602 )           (1 )        (1 )
                 Add: Stock-based employee compensation expense included in
                   reported net income, net of related tax effects                                —              —             —
                 Pro Forma net income                                                        $ 3,955        $ 2,523       $ 4,328
                 Basic Earnings Per Share:
                 As Reported                                                                 $    0.76      $    0.50     $   0.32
                 Pro Forma                                                                   $    0.66      $    0.50     $   0.32
                 Diluted Earnings Per Share:
                 As Reported                                                                 $    0.68      $    0.43     $   0.28
                 Pro Forma                                                                   $    0.59      $    0.43     $   0.28


Calculations of the pro forma fair value of stock-based awards granted through August 2, 2005 were based on a single option valuation
approach as a non-public company. Forfeitures are recognized as they occur. The Company’s calculations were made using the minimum value
method with the following weighted average assumptions at September 30, 2003 (there were no grants in 2004):

                              Risk-free interest rate                                                            2.97 %
                              Expected life in years                                                                5
                              Expected volatility                                                               None
                              Dividends                                                                         None


In the Company’s fourth quarter of 2005 the Company granted 135,103 nonqualified options to purchase the Company’s common stock that
were fully vested by September 30, 2005. The Company utilized the Black-Scholes option valuation model to value these post initial public
offering grants for pro forma presentation of net income and earnings per share as if the fair value-based accounting method in SFAS 123 had
been used. The Company’s computations used the following assumptions to derive the options fair value and related compensation expense:

                              Risk-free interest rate                                                    4.1% to 4.2 %
                              Expected life in years                                                               5
                              Expected volatility                                                              36.7 %
                              Dividends                                                                       None


Reclassifications — Certain reclassifications have been made, none of which affected results of operations, to present the financial statements
on a consistent basis.

Recently Issued and New Accounting Pronouncements — In May 2003, the FASB issued SFAS 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity (“SFAS 150”). This Statement establishes standards for how the Company
classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires the Company to classify a
financial instrument that is within its scope as a liability (or an asset in some circumstances).


                                                                          F- 12
Many of those instruments were previously classified as equity. The Company adopted SFAS 150 on July 1, 2003. As a result, the Company
reclassified its redeemable preferred stock as a liability (previously classified as mezzanine equity) and recorded dividend accretion on a
prospective basis as interest expense. Dividend accretion included in interest expense was $4,055, $4,239 and $999 in 2005, 2004 and 2003,
respectively. In August 2005, the Company redeemed all of the Series A preferred stock with a portion of the proceeds from its initial public
offering (See Note 8).

In December 2003, FASB issued Interpretation No. 46(R), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 . This
Interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements , to certain entities in which
equity investors do not have the characteristics of a controlled financial interest or in which equity investors do not bear the residual economic
risks. The adoption of this Interpretation did not have a material effect on the Company’s financial statements.

In November 2004, the FASB issued SFAS 151, Inventory Costs, an Amendment of ARB No. 43,Chapter 4 (“SFAS 151”). SFAS 151 clarifies
that inventory costs that are “abnormal” are required to be charged to expense as incurred as opposed to being capitalized into inventory as a
product cost. SFAS 151 provides examples of “abnormal” costs which include costs of idle facilities, excess freight and handling costs and
wasted material (spoilage). SFAS 151 is effective for the Company’s fiscal year beginning October 1, 2005. The impact of SFAS 151 will not
have a material effect on the Company’s consolidated financial statements.

In December 2004, the FASB issued SFAS 123 (Revised), Share-Based Payment (“SFAS 123-R”). SFAS 123-R replaces SFAS 123 and
supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB No. 25”). Adoption of SFAS 123-R will require the
Company to record a non-cash expense for its stock compensation plans using the fair value method. Historically, the Company recorded its
compensation cost in accordance with APB No. 25, which does not require the recording of an expense for its equity related compensation
plans if stock awards were granted at a price equal to the fair market value of MWI’s common stock on the grant date. SFAS 123-R is effective
for the Company’s fiscal year beginning October 1, 2005. At October 1, 2005, the Company had no unvested stock awards that would be
required to be recorded under the provisions of SFAS 123-R and therefore SFAS 123-R is not expected to have a material impact on the
Company’s consolidated financial statements.

In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29 (“SFAS 153”),
which eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges
of nonmonetary assets that do not have commercial substance. The Company is required to adopt SFAS 153 for nonmonetary asset exchanges
occurring in the first quarter of 2006 and its adoption is not expected to have a significant effect on the Company’s consolidated financial
statements.

In May 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections (“SFAS 154”) . SFAS 154 replaces FASB Statement
No. 3, Reporting Accounting Changes in Interim Financial Statements , and replaces ABP Opinion No. 20, Accounting Changes. SFAS 154 is
effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005 and will be effective for the
Company for its fiscal year ending September 30, 2007. The impact of SFAS 154 is not expected to have a material effect on the Company’s
consolidated financial statements.

In September 2005, the Emerging Issues Task Force issued EITF No. 04-13, Accounting for Purchases and Sales of Inventory with the Same
Counterparty (“EITF 04-13”). EITF 04-13 requires that purchases and sales of inventory with the same counterparty be accounted for as a
nonmonetary transaction within the scope of APB Opinion No. 29, Accounting for Nonmonetary Transactions. EITF 04-13 is effective for new
arrangements entered into, or modifications or renewals of existing arrangements, beginning in


                                                                         F- 13
the first interim or annual reporting period beginning after March 15, 2006. The impact of EITF 04-13 is not expected to have a material effect
on the Company’s consolidated financial statements.

3.   Business Acquisitions

On November 1, 2004, the Company purchased certain assets of Memorial Pet Care, Inc., a pet crematorium, for $400 cash (plus
approximately $32 of direct acquisition costs).

On January 3, 2005, the Company purchased substantially all of the assets of Vetpo Distributors, Inc. (“Vetpo”), a regional animal health
products distributor located in Holland, Michigan, for $4,500 in cash (plus approximately $101 of direct acquisition costs) and the issuance of a
note payable for $487.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition.
These preliminary purchase price allocations are based on a combination of third-party valuations and internal analyses and may be adjusted
during the allocation period as defined in SFAS No. 141, Business Combinations .

                                                                                 Memorial Pet                     Vetpo
                                                                                  Care, Inc.                Distributors, Inc.
         Receivables                                                              $       24                 $         2,068
         Inventories                                                                      —                            1,927
         Property and equipment                                                          107                               91
         Goodwill                                                                         66                           1,386
         Intangibles                                                                     246                           1,543
         Total assets acquired                                                           443                           7,015
         Accounts payable                                                                 11                           1,927
         Note payable                                                                     —                              487
         Total liabilities assumed                                                        11                           2,414
         Net assets acquired                                                       $     432                  $        4,601



The $1,452 recorded in goodwill is expected to be deductible for tax purposes over 15 years.

4.   Receivables

Receivables consist of the following at September 30:

                                                                                                       2005          2004
                   Trade                                                                             $ 69,969      $ 55,682
                   Vendor rebates and programs                                                           6,882         4,237
                   Related party — (See Note 14)                                                         1,429           366
                                                                                                        78,280        60,285
                   Allowance for doubtful accounts                                                      (1,181 )        (565 )
                                                                                                     $ 77,099      $ 59,720


Approximately 7% and 8% of the Company’s trade receivables resulted from transactions with a single customer as of September 30, 2005 and
2004, respectively.


                                                                         F- 14
5.   Property and Equipment

Property and equipment consists of the following at September 30:

                                                                                                      2005         2004
                   Land                                                                              $    169     $    322
                   Buildings and leasehold improvements                                                 2,293        3,183
                   Machinery, furniture and equipment                                                   8,140        6,960
                   Computer equipment                                                                   2,759        2,939
                   Construction in progress                                                               630           —
                                                                                                       13,991       13,404
                   Accumulated depreciation and amortization                                           (7,072 )     (7,397 )
                                                                                                     $ 6,919      $ 6,007



The Company recorded depreciation expense of $1,392, $1,146 and $971 for the years ended September 30, 2005, 2004 and 2003, respectively.

6.   Intangibles

Intangible assets consists of the following at September 30:

                                                                                       Useful Life           2005        2004
             Amortizing:
              Customer lists                                                              10 years          $ 1,589      $ —
              Covenants not to compete                                                     5 years              112        —
              Other                                                                        5 years               36        —
                                                                                                              1,737        —
             Accumulated amortization                                                                          (145 )      —
                                                                                                              1,592        —
             Non-Amortizing:
               Trade names                                                                                       52        —
                                                                                                            $ 1,644      $ —




Projected amortization expense for existing intangible assets is $189 for each of the fiscal years ending 2006, 2007, 2008 and 2009 and $166
for the fiscal year ending 2010.


                                                                       F- 15
7.   Line-of-Credit and Long-Term Debt

Line-of-Credit — The Company has a line-of-credit agreement with two lenders for a credit facility that allows for borrowings up to $70,000.
The line-of-credit is secured by a security interest in substantially all of the Company’s assets and terminates on June 18, 2007. Interest is due
monthly at the following rates: 1) LIBOR plus a margin (5.41% at September 30, 2005); or 2) the prime rate (6.75% at September 30, 2005).
The lenders also receive an unused line fee and letter of credit fee equal to 0.375% of the unused amount of the revolving credit facility. The
Company’s outstanding balance on this facility at September 30, 2005 and 2004 was $24,690 and $49,129, respectively. The line-of-credit
contains certain restrictive financial covenants as well as restrictions on dividend payments and future debt borrowings. The credit agreement
allows the Company to issue up to $10,000 in letters of credit. The letters of credit typically act as guarantee of payment to certain third parties
in accordance with specified terms and conditions. The Company had three letters of credit totaling $300 and two letters of credit totaling
$3,100 at September 30, 2005 and 2004, respectively. There were no outstanding borrowings on these letters of credit at September 30, 2005 or
2004.

As part of the credit agreement, the Company was required to maintain an interest rate swap on a minimum notional amount of $12,000 of
borrowings under its revolving credit facility. On July 7, 2004 and 2003, the Company entered into interest rate swap agreements for $12,000
of its line-of-credit borrowings. Under the swaps, the Company received interest at a floating rate based on LIBOR and paid interest at a fixed
rate of 2.49% and 1.33%, respectively. Net payments due under the swaps were settled monthly and the swaps expired on July 7, 2005 and
2004, respectively. The Company received a waiver from its lenders for the requirement to maintain an interest rate swap effective as of July 7,
2005.

Long-Term Debt — In December 2003 the Company amended the line-of-credit agreement to include borrowings up to $2,500 on a loan for
capital equipment purchases only. The capital equipment line-of-credit was secured by a security interest in substantially all of the Company’s
assets. Interest was due monthly at the following rates: 1)LIBOR plus a margin; or 2) the prime rate plus a margin. In August 2005 the
Company terminated the capital equipment line-of-credit and paid off the outstanding balance.

On January 3, 2005, the Company issued an unsecured non-negotiable promissory note in the aggregate principal amount of $487 in partial
consideration for the purchase of substantially all the assets of Vetpo (See Note 3). The note bears interest at the prime rate (6.75% at
September 30, 2005), payable quarterly. The principal of the note is payable in five equal annual installments, beginning January 1, 2006.

                                                                                                           2005       2004
                   Capital equipment note payable, monthly principal plus interest, interest rate
                     5.25% at September 30, 2004                                                           $ —        $1,020
                   Unsecured non-negotiable promissory note, annual principal payments of $97
                     beginning January 1, 2006, interest paid quarterly, interest rate 6.75% at
                     September 30, 2005                                                                     487           —
                                                                                                            487        1,020
                     Current portion                                                                        (97 )       (288 )
                       Total long-term debt                                                                $390        $ 732


8.   Redeemable Preferred Stock

The Company had authorized 30,000 shares of $1 par value Series A preferred stock, with 26,786 shares issued and outstanding at
September 30, 2004. The redeemable preferred stock was subject to mandatory redemption on June 18, 2012 and had a liquidation preference
of $1,000 per share (plus accumulated,


                                                                          F- 16
accrued and unpaid dividends). The holders of redeemable preferred stock were entitled to a cumulative 13% annual dividend based on the
liquidation preference. The Company had the right to redeem any outstanding shares at any time but all shares were required to be redeemed no
later than June 18, 2012. In August 2005, the Company used a portion of the proceeds from its initial public offering (See Note 9) to redeem all
of the redeemable preferred stock.

9.   Common Stock and Stock Options

On July 28, 2005, the Company amended its Amended and Restated Certificate of Incorporation to authorize 20 million shares of common
stock and declared a 5.5-to-1 common stock split in the form of a common stock dividend. All numbers of common stock and per share data in
the accompanying consolidated financial statements and related notes have been retroactively restated to give effect to the amendment of the
Amended and Restated Certificate of Incorporation and stock split.

Initial Public Offering

On August 3, 2005, we completed our initial public offering in which we sold an aggregate of 4,983,334 shares (including the exercise of the
underwriters’ over-allotment option) of our common stock at a price of $17 per share. We received net proceeds of $77,159 after deducting the
underwriting discounts and offering expenses. We used the net proceeds to redeem all of our Series A preferred stock for approximately
$39,789 and to repay approximately $37,370 of borrowings outstanding on our revolving credit facility under our amended credit agreement.

2002 Stock Option Plan

The Company has a 2002 Stock Option Plan (the “2002 Plan”) to provide its directors, executives and other key employees with additional
incentives by allowing them to acquire an ownership interest in the Company and, as a result, encouraging them to contribute to its success. At
September 30, 2005 the Company had 507,688 shares of its common stock reserved for issuance under the 2002 Plan. The options granted
under the 2002 Plan are nonqualified stock options that have an exercise price per share equal to fair market value of the common stock at the
time of grant. The term of each option is determined by the Company’s board of directors or by a designated committee of the board but the
term of any option may not exceed ten years from the date of grant. In 2003, the Company granted 543,951 nonqualified stock options with an
exercise price of $0.18 per share under the 2002 Plan. The stock options generally lapse ten years after issuance or 120 days after the option
holder ceases to be an employee depending upon the cause of termination. The options vest in various amounts over three to five-year periods
beginning upon the achievement of annual financial targets as established by the option agreement beginning with the year ended
September 30, 2002 and ending with the year ended September 30, 2006. All unvested options as of June 18, 2009 become fully vested if the
option holder is employed with the Company on such date. Shares issued upon exercise of options granted under the 2002 Plan had a
repurchase right, which expired in August 2005 in connection with the Company’s initial public offering. Unvested options for which the
annual financial targets had been achieved became fully vested upon the completion of the Company’s initial public offering in August 2005.
In 2005, no options were granted under the 2002 Plan, 36,267 options were exercised and 60,436 were forfeited. At September 30, 2005 the
Company had outstanding 447,248 stock options under the 2002 Plan with 253,848 vested and exercisable.

2005 Stock Option Plan

In July 2005 the Company adopted the 2005 Stock-Based Award and Incentive Compensation Plan (the “2005 Plan”). Under the 2005 Plan, the
Company may offer restricted shares of its common stock and grant options to purchase shares of its common stock to selected employees. The
purpose of the 2005


                                                                        F- 17
Plan is to promote the Company’s long-term financial success by attracting, retaining and rewarding eligible participants. The number of shares
reserved for issuance under the stock incentive plan is 1,200,000 shares. At September 30, 2005 the Company had 1,198,590 shares of its
common stock available for issuance under the 2005 Plan.

The 2005 Plan permits the Company to grant stock options (both incentive stock options and non-qualified stock options), restricted stock and
deferred stock. The compensation committee will determine the number and type of stock-based awards to each participant, the exercise price
of each award, the duration of the award (not to exceed ten years), vesting provisions and all other terms and conditions of such award in
individual award agreements. The 2005 Plan provides that upon termination of employment with the Company, unless determined otherwise by
the compensation committee at the time options are granted, the exercise period for vested awards will generally be limited, provided that
vested awards will be canceled immediately upon a termination for cause or voluntary termination. The 2005 Plan provides for the cancellation
of all unvested awards upon termination of employment with the Company, unless determined otherwise by the compensation committee at the
time awards are granted.

The 2005 Plan provides that upon a change in control, the compensation committee may, at its discretion:

                fully vest any award under the 2005 Plan;

                cancel any outstanding award in exchange for a payment in cash of an amount equal to the excess of the change in control
             price over the exercise price of the award;

                after giving the holder an opportunity to exercise any outstanding award, cancel or terminate any unexercised award; or,

                provide that any such award will be honored or assumed, or new rights substituted therefore by the new employer on a
             substantially similar basis and in accordance with the terms and conditions of the 2005 Stock Plan.

During the fourth quarter of 2005, the Company granted 135,103 nonqualified stock options with a weighted average exercise price of $18.43
and a term of ten years. The options were fully vested by September 30, 2005. During the fourth quarter of 2005, option holders exercised
1,410 vested options and 606 were forfeited under the 2005 Plan.

A summary of activity under the 2002 and 2005 Plans are as follows:

                                                2005                             2004                             2003
                                                       Weighted                         Weighted                         Weighted
                                                       average                          average                          average
                                     Number of         exercise        Number of        exercise       Number of         exercise
                                      Shares            price           Shares           price          Shares            price
        Outstanding at beginning
          of year                        543,951             $ 0.18       543,951          $0.18                —            $ —
        Granted                          135,103             18.43             —              —            543,951            0.18
        Exercised                        (37,677 )             0.81            —              —                                 —
        Cancelled or expired             (61,042 )             0.35            —              —                 —               —
        Outstanding at end
          of year                        580,335             $ 4.37       543,951          $0.18           543,951          $0.18
        Exercisable at end of
          year                           386,935             $ 6.47        65,283          $0.18            21,761          $0.18



                                                                        F- 18
                                                              Outstanding options                              Exercisable options
                                                                     Weighted
                                                                      average
                                                                     remaining           Weighted                               Weighted
                                                                    contractual          average                                average
                                                 Number of               life            exercise          Number of            exercise
       Range of exercise prices                   Shares             (in years)           price             Shares               price
       $ 0.18 - $16.99                             447,248                   6.7            $ 0.18           253,848               $ 0.18
       $17.00 - $19.99                              99,137                   9.8           $17.03             99,137              $17.03
       $20.00 - $23.06                              33,950                  10.0           $22.61             33,950              $22.61


10.   Computation Of Earnings Per Common Share (In thousands except per share data)

                                                                 2005                      2004                         2003
                                                           Basic     Diluted         Basic     Diluted            Basic     Diluted
        Net income                                         $4,557     $4,557         $2,524     $2,524            $1,615     $1,615
        Weighted average common shares
          outstanding                                        5,970       5,970         5,038          5,038         5,013         5,013
        Effect of diluted securities Contingent stock                      412                          522                         522
        Stock options                                                      315                          318                         210
        Weighted average shares outstanding                              6,697                        5,878                       5,745
        Earnings per share                                  $ 0.76       $ 0.68       $ 0.50          $ 0.43        $ 0.32        $ 0.28
        Anti-dilutive shares excluded from
          calculation                                                        34                           —                          —


11.   Income Taxes

The components of the U.S. Federal and state income tax expense consist of the following:

                                                                                               2005        2004          2003
                 Current payable:
                   U.S. Federal                                                                $4,601      $3,268       $2,579
                   State                                                                          702         677          524
                                                                                                5,303       3,945        3,103
                 Deferred:
                   U.S. Federal                                                                  (168 )       278           11
                   State                                                                          (37 )        57            2
                                                                                                 (205 )       335           13
                                                                                               $5,098      $4,280       $3,116


The Company’s deferred tax assets and liabilities consist of the following at September 30:


                                                                        F- 19
                                                                                                         2005          2004
                Deferred tax assets:
                  Investments                                                                              $ 144        $ 148
                  Allowance for doubtful accounts                                                            451          216
                  Inventories                                                                                199          132
                  Revenue recognition                                                                         56           75
                  Other                                                                                       96            9
                Total deferred tax assets                                                                    946          580
                Deferred tax liabilities:
                  Property and equipment                                                                     (786 )      (755 )
                  Prepaid expenses                                                                           (316 )      (189 )
                  Other                                                                                       (12 )        —
                Total deferred tax liabilities                                                             (1,114 )      (944 )
                Net deferred tax liabilities                                                              $ (168 )      $(364 )


The Company believes that realization of these deferred assets is more likely than not. Accordingly, no valuation allowance has been recorded.

Income tax expense differed from income taxes at the U.S. federal statutory tax rate of 34% for all periods presented as follows:

                                                                                            2005          2004         2003
                Taxes computed at statutory rate                                            34.0 %        34.0 %       34.0 %
                State income taxes (net of federal) income tax benefit                       4.3           7.1           3.9
                Redeemable preferred stock dividend accretion                               14.3          21.2           4.6
                Other                                                                        0.2           0.6          (0.6 )
                                                                                            52.8 %        62.9 %       41.9 %



The decrease in the effective tax rate for the year ended September 30, 2005 as compared to the year ended September 30, 2004 was primarily
attributable to the lower nondeductible accretion of dividends on the Series A preferred stock in 2005 due to the redemption of all of the
Series A preferred stock in August 2005 and due to actual state income tax expense being less than estimated due to the utilization of state tax
credits. The increase in the effective rate for the year ended September 30, 2004 as compared to September 30, 2003 was attributable to the
nondeductible accretion of dividends on the Series A preferred stock beginning on July 1, 2003.

12.   Statement of Cash Flow — Supplemental and Noncash Disclosures

                                                                                              2005        2004         2003
                 Supplemental Disclosures
                 Cash paid for interest                                                       $2,034      $1,719       $1,894
                 Cash paid for income taxes                                                    4,122       4,448        3,155
                 Noncash Activities
                 Increase (decrease) in the fair value of interest rate swaps                     —            8          (93 )
                 Accretion of redeemable preferred stock                                          —           —         2,714
                 Equipment acquisitions financed with note payable                                —          945           —
                 Equipment acquisitions financed with accounts payable                           642          —            —



                                                                          F- 20
13.   Commitments and Contingencies

The Company has operating leases for office and distribution center space and equipment for varying periods. Certain leases have renewal
options and require contingent payments for increases, including executory costs, in property taxes, insurance and certain other costs in excess
of a base year amount. Total rent expense for the years ended September 30, 2005, 2004 and 2003 were $1,800, $1,316 and $766, respectively.

The aggregate future noncancelable minimum rental payments on operating leases at September 30, 2005 are as follows:

                       2006                                                                                     $1,494
                       2007                                                                                      1,433
                       2008                                                                                      1,197
                       2009                                                                                      1,054
                       2010                                                                                        839
                       Thereafter                                                                                  886
                                                                                                                $6,903



The Company is not a party to any material pending legal proceedings and is not aware of any claims that could have a material adverse effect
on our financial position, results of operations, or cash flows .

14.   Related Party Transactions

On June 18, 2002, the Company entered into a management services and consulting agreement (the “agreement”) with Bruckmann, Rosser,
Sherrill & Co. LLC (“BRS”), a major shareholder, and Agri Beef Co. (“Agri Beef”), a major shareholder. The agreement stated that BRS
would provide certain management, consulting and financial planning services to the Company’s board of directors and management. Under
the terms of the agreement, BRS received an annual fee equal to the greater of $250 or two and one-half percent of the Company’s EBITDA, as
defined in the agreement, each fiscal year. The agreement also stipulated that Agri Beef was entitled to 20% of the fee owed to BRS. In
August 2005, the Company, BRS and Agri Beef terminated the agreement for a termination fee of $1,600 to BRS and $400 to Agri Beef. BRS
received $365, $309 and $200 and Agri Beef received $91, $77 and $50 for services performed under the agreement in 2005, 2004 and 2003,
respectively. In 2003, the Company also paid Agri Beef $76 for data processing expenses.

MWI Co., a subsidiary of the Company, holds a 50% membership interest in Feeders’ Advantage that is accounted for as an investment using
the equity method. Sales of products to Feeders’ Advantage were $28,473, $22,163 and $22,960 in 2005, 2004 and 2003, respectively. MWI
Co. charged Feeders’ Advantage for certain operating and administrative services of $428, $421 and $390 in 2005, 2004 and 2003,
respectively. The Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors are each members of
the board of managers of Feeders’ Advantage.

15.   Employee Benefit Plans

Through March 31, 2004, the Company, along with Feeders’ Advantage and Agri Beef, participated in a multi-employer defined contribution
profit sharing plan with a 401(k) arrangement covering all employees of the Company. On April 1, 2004, the Company, along with Feeders’
Advantage, established a new multi-employer defined contribution profit sharing plan with a 401(k) arrangement and the account balances for
all eligible employees were transferred to this plan.


                                                                        F- 21
To become eligible for the profit sharing portion of the plan, an employee must complete two years of service and attain the age of twenty-one.
Participation is automatic. To become eligible for the 401(k) portion of the plan, the employee must complete three-months of service and
attain the age of twenty-one.

Both portions of the plan allow for employer matching contributions. The Company is required to match 50% of the employee’s contribution to
the 401(k) portion of the plan up to 6% of the employee’s salary. The Company’s combined matching contributions for the 401(k) portion of
the plan were $549, $444 and $431 in 2005, 2004 and 2003, respectively. Employee’s contributions are fully vested immediately while
employer contributions vest over a five-year period.

Contributions to the profit sharing portion of the Plans are discretionary, ranging from 0 to 3%, and are approved by the Company’s Board of
Directors. Total combined contributions for 2005, 2004 and 2003 were $598, $448, and $423, respectively. Employer contributions are fully
vested immediately.

16.   Financial Instruments

Financial Instruments — The following disclosure of the estimated fair value of financial instruments is made in accordance with the
requirements of SFAS No. 107, Disclosures About Fair Value of Financial Instruments . The estimated fair value amounts have been
determined by the Company, using available market information and appropriate valuation methodologies. However, considerable judgment is
required in interpreting market data to develop the estimate of fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value amounts.

The carrying amounts of receivables, investments, accounts payable, long-term debt and the line-of-credit are a reasonable estimate of their fair
value.

Derivative Financial Instruments — The Company entered into interest rate swaps that qualified as derivatives and were designated as cash
flow hedges. The Company’s interest rate swaps expired on July 7, 2005 and were not renewed. At September 30, 2004, the fair value of the
swap was a liability of $23. The Company recorded this liability with a corresponding charge to other comprehensive loss (reduced by deferred
tax assets of $9). Ineffectiveness of the hedges was not significant. The entire amount included in accumulated other comprehensive loss at
September 30, 2004 was reclassified to income during 2005 as the related interest rate swap expired on July 7, 2005.


                                                                         F- 22
17.     Quarterly Financial Data (Unaudited)

                                                                                          Three-Months Ended
                                                                      Dec. 31,           Mar. 31,        June 30,        Sept. 30,                           Year
                                                                                 Dollars and shares in thousands, except per share data
      2005
      Total revenues                                                     $108,994             $116,410             $137,987              $133,264             $496,655
      Gross profit                                                         16,624               16,472               18,032                18,818               69,946
      Operating income (1)                                                  5,268                3,282                4,422                 2,799               15,771
      Net income (1)                                                        1,656                  595                1,407                   899                4,557
      Earnings per common share — diluted (2)                             $ 0.28               $ 0.10               $ 0.24                $ 0.10               $ 0.68
      Weighted average common shares outstanding
        used in the diluted earnings per share
        calculation                                                          5,882                 5,878                5,876                9,113                 6,697
      2004
      Total revenues                                                     $ 90,054             $ 94,163             $106,186              $103,879             $394,282
      Gross profit                                                         13,725               13,632               14,205                14,036               55,598
      Operating income                                                      3,603                2,920                3,324                 2,733               12,580
      Net income                                                              841                  542                  717                   424                2,524
      Earnings per common share — diluted (3)                             $ 0.14               $ 0.09               $ 0.12                $ 0.07               $ 0.43
      Weighted average common shares outstanding
        used in the diluted earnings per share
        calculation                                                          5,878                 5,878                5,878                5,878                 5,878

(1)              Operating income for the fourth quarter of 2005 includes a $2,000 pretax charge ($1,220 after-tax charge) related to the termination of a management services
          and consulting agreement.

(2)               The sum of the quarterly earnings per share amounts does not agree to the year-to-date earnings per share amount as a result of the issuance of 4,983 of common
          stock in August 2005 upon the completion of the Company’s initial public offering.

(3)              The sum of the quarterly earnings per share amounts does not agree to the year-to-date earnings per share amount as a result of rounding.



                                                                                        F- 23
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of MWI Veterinary Supply, Inc.
Meridian, Idaho

We have reviewed the accompanying condensed consolidated balance sheet of MWI Veterinary Supply, Inc. and subsidiaries (the “Company”)
as of March 31, 2006 and the related condensed consolidated statements of income and of comprehensive income for the three-month and
six-month periods ended March 31, 2006 and 2005, and of cash flows for the six-month periods ended March 31, 2006 and 2005. These interim
financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of
interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial
statements for them to be in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boise, Idaho
May 1, 2006


                                                                        F- 24
                                      MWI VETERINARY SUPPLY, INC.
                          CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                    Unaudited
                            Dollars and shares in thousands, except per share amounts


                                                                     Three-months                   Six-months
                                                                    ended March 31,              ended March 31,
                                                                    2006       2005              2006        2005
Revenues:
  Product sales                                                 $ 133,255      $ 108,888     $ 260,303     $ 210,148
  Product sales to related party                                    8,001          6,142        17,356        12,947
  Commissions                                                       2,093          1,380         3,506         2,309
     Total revenues                                               143,349        116,410       281,165       225,404
Cost of product sales                                             123,421         99,938       238,485       192,308
Gross profit                                                       19,928         16,472        42,680        33,096
Selling, general and administrative expenses                       15,159         12,803        29,712        23,819
Depreciation and amortization                                         473            387           915           727
Operating income                                                    4,296          3,282        12,053         8,550
Other income (expense):
  Interest expense                                                     (578 )      (1,776 )       (1,133 )     (3,545 )
  Earnings of equity method investees                                    37            27             82           59
  Other                                                                 137            57            227          124
     Total other expense                                               (404 )      (1,692 )         (824 )     (3,362 )
Income before taxes                                                   3,892         1,590         11,229        5,188
Income tax expense                                                   (1,537 )        (995 )       (4,435 )     (2,937 )
Net income                                                      $     2,355 $         595 $        6,794 $      2,251
Earnings per common share:
  Basic                                                         $       0.22   $      0.12   $      0.64   $     0.44
  Diluted                                                       $       0.22   $      0.10   $      0.62   $     0.38
Weighted average common shares outstanding:
  Basic                                                              10,586         5,062         10,582       5,062
  Diluted                                                            10,884         5,878         10,873       5,880


                                See notes to condensed consolidated financial statements.


                                                            F- 25
                                  MWI VETERINARY SUPPLY, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                            Unaudited
                                       Dollars in thousands


                                                                               Three-months              Six-months
                                                                              ended March 31,          ended March 31,
                                                                             2006         2005         2006       2005
Net income                                                                  $ 2,355      $ 595        $ 6,794   $ 2,251
Other comprehensive loss:
  Interest rate swap:
     Change in fair value, net of tax of $2 and $17, respectively                  —              4          —           27
       Total comprehensive income                                           $   2,355   $       599   $   6,794   $   2,278



                                    See notes to condensed consolidated financial statements.


                                                                    F- 26
                                      MWI VETERINARY SUPPLY, INC.
                             CONDENSED CONSOLIDATED BALANCE SHEET
                                                    Unaudited
                            Dollars and shares in thousands, except per share amounts


                                                                                           March 31,
                                                                                             2006
Assets
Current Assets:
   Cash                                                                                    $      34
   Receivables, net                                                                           82,291
   Inventories                                                                                63,827
   Prepaid expenses and other current assets                                                   1,797
   Deferred income taxes                                                                         581
     Total current assets                                                                    148,530
Property and equipment, net                                                                    6,298
Goodwill                                                                                      29,739
Intangibles, net                                                                               1,551
Other assets, net                                                                              2,962
Total assets                                                                               $ 189,080
Liabilities And Stockholders’ Equity
Current Liabilities:
  Line-of-credit                                                                           $   24,654
  Accounts payable                                                                             63,040
  Accrued expenses                                                                              6,583
  Current maturities of long-term debt                                                             97
     Total current liabilities                                                                 94,374
Deferred income taxes                                                                             601
Long-term debt                                                                                    292
Commitments and contingencies
Stockholders’ Equity
  Common stock $0.01 par value, 20,000 authorized; 10,593 shares issued and outstanding,
     respectively                                                                                106
  Additional paid in capital                                                                  78,721
  Retained earnings                                                                           14,986
     Total stockholders’ equity                                                               93,813
Total liabilities and stockholders’ equity                                                 $ 189,080



                               See notes to condensed consolidated financial statements.


                                                           F- 27
                                          MWI VETERINARY SUPPLY, INC.
                               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    Unaudited
                                               Dollars in thousands

                                                                                          Six-months ended March 31,
                                                                                        2006                      2005
Cash Flows From Operating Activities:
  Net income                                                                       $         6,794           $           2,251
  Adjustments to reconcile net income to net cash provided by operating
    activities:
    Depreciation and amortization                                                              918                         731
    Amortization of debt issuance costs                                                         70                          70
    Deferred income taxes                                                                     (148 )                      (149 )
    Earnings of equity method investees                                                        (82 )                       (60 )
    Gain on disposal of property and equipment                                                 (62 )                        (4 )
    Accretion of redeemable preferred stock                                                     —                        2,315
    Distribution of equity method investee                                                      —                           43
    Other                                                                                       (9 )                        —
    Changes in operating assets and liabilities (net of effects of
       acquisitions):
       Receivables                                                                          (5,192 )                  (522 )
       Inventories                                                                           4,959                      15
       Prepaid expenses and other current assets                                               214                     101
       Accounts payable                                                                     (5,731 )                 5,370
       Accrued expenses                                                                        272                     510
          Net cash provided by operating activities                                          2,003                  10,671
Cash Flows From Investing Activities:
    Purchases of property and equipment                                                     (2,238 )                 (1,165 )
    Deposit for property and equipment acquisition                                          (1,414 )                     —
    Business acquisitions                                                                       —                    (5,032 )
    Sale of property and equipment                                                           1,455                        4
    Other                                                                                        6                      (16 )
          Net cash used in investing activities                                             (2,191 )                 (6,209 )
Cash Flows From Financing Activities:
    Proceeds from stock options                                                                271                       —
    Tax benefit of common stock options                                                         53                       —
    Payment on debt                                                                            (97 )                   (164 )
    Net payments on line-of-credit                                                             (36 )                 (4,995 )
    Proceeds from issuance of debt                                                              —                       700
          Net cash provided by/(used in) financing activities                                  191                   (4,459 )
Increase in Cash                                                                                 3                        3
Cash at Beginning of Period                                                                     31                       28
Cash at End of Period                                                               $           34            $          31
Supplemental Disclosures:
Cash paid for interest                                                             $         1,013           $           1,109
Cash paid for income tax                                                                     3,992                       2,498


                                        See notes to condensed consolidated financial statements.


                                                                    F- 28
                                                          MWI Veterinary Supply, Inc.
                                            Notes to Condensed Consolidated Financial Statements
                                            (Dollars in thousands, except share and per share data)

1. General

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the results of operations, statement of comprehensive
income, financial position and cash flows of MWI Veterinary Supply, Inc., formerly named MWI Holdings, Inc., and its wholly-owned
subsidiaries (“the Company”). All material intercompany balances have been eliminated.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary to
present fairly, in all material respects, the results of the Company for the periods presented. These condensed consolidated financial statements
have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements
should be read in conjunction with the annual consolidated financial statements and accompanying notes included herein. The results of
operations for the six-months ended March 31, 2006 are not necessarily indicative of results to be expected for the entire fiscal year.

Use of Estimates

The preparation of the Company’s consolidated financial statements, in conformity with accounting principles generally accepted in the United
States, requires management to make estimates and assumptions. Some of these estimates require difficult, subjective or complex judgments
about matters that are inherently uncertain. As a result, actual results could differ from these estimates. These estimates and assumptions affect
the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.

Revenue Recognition

MWI sells products that it sources from vendors to its customers through either a “buy/sell” transaction or an agency relationship with its
vendors. In a “buy/sell” transaction, MWI purchases or takes inventory of products from the vendor. When a customer places an order with
MWI, the Company picks, packs, ships and invoices the customer for the order. MWI recognizes revenue from “buy/sell” transactions as
product sales when the product is delivered to the customer. The Company accepts product returns from its customers. The Company estimates
returns based on historical experience and recognizes these estimated returns as a reduction of product sales. Product returns have not been
significant to the Company’s financial statements. In an agency relationship, MWI does not purchase and take inventory of products from its
vendors. MWI receives an order from a customer, then transmits the order to the vendor, who picks, packs and ships the order to the customer.
In some cases, the vendor invoices and collects payment from the customer, while in other cases MWI invoices and collects payment from the
customer on behalf of the vendor. MWI receives a commission payment for soliciting the order from the customer and for providing other
customer service activities. Commissions are recognized when the services upon which the commissions are based are complete. Gross billings
from agency contracts were


                                                                           F- 29
$45,350 and $29,597 for the three-months ended March 31, 2006 and 2005, respectively, and generated commission revenue of $2,093 and
$1,380, respectively. Gross billings from agency contracts were $72,220 and $48,063 for the six-months ended March 31, 2006 and 2005,
respectively, and generated commission revenue of $3,506 and $2,309, respectively.

Cost of Product Sales and Vendor Rebates

Cost of product sales includes the Company’s inventory product cost; including shipping costs to and from its distribution centers. Vendor
rebates are recorded based on the terms of the contracts or programs with each vendor. The Company receives quarterly, trimester and annual
performance-based rebates from third-party vendors based upon attainment of certain sales and/or purchase goals. Sales rebates are classified in
the accompanying consolidated statements of income as a reduction to cost of product sales at the time the sales performance measures are
achieved. Purchase rebates are measured against inventory purchases from the vendors and are classified as a reduction of inventory until the
product is sold. When the inventory is sold and purchase measures are achieved, purchase rebates are recognized as a reduction to cost of
product sales.

2. Effect Of Recently Issued Accounting Standards

In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”)
No. 151, Inventory Costs, an Amendment of ARB No. 43, Chapter 4 (“SFAS 151”). SFAS 151 clarifies that inventory costs that are “abnormal”
are required to be charged to expense as incurred as opposed to being capitalized into inventory as a product cost. SFAS 151 provides examples
of “abnormal” costs that include costs of idle facilities, excess freight and handling costs, and wasted material (spoilage). SFAS 151 was
effective for the Company’s fiscal year beginning October 1, 2005 and did not have a material effect on the Company’s consolidated financial
statements.

In December 2004, the FASB issued SFAS 123 (Revised), Share-Based Payment (“SFAS 123 R”). SFAS 123 R replaces SFAS123,
Accounting for Stock-based Compensation (“SFAS 123”), as amended by SFAS 148, Accounting for Stock Based Compensation — Transition
and Disclosure and supersedes Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees . Adoption of
SFAS 123 R requires the Company to record non-cash expense for the Company’s stock compensation plans using the fair value method.
SFAS 123 R was effective for the Company on October 1, 2005 and the adoption of SFAS 123 R did not have a material effect on the
Company’s consolidated financial statements.

In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29 (“SFAS 153”),
which eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges
of nonmonetary assets that do not have commercial substance. The Company adopted SFAS 153 as of October 1, 2005 and the adoption did not
have a material effect on the Company’s consolidated financial statements.

In May 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections (“SFAS 154”). SFAS 154 replaces FASB Statement
No. 3, Reporting Accounting Changes in Interim Financial Statements , and replaces ABP No. 20, Accounting Changes . SFAS 154 is effective
for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005 and will be effective for the Company
for its fiscal year beginning October 1, 2006. The adoption of SFAS 154 is not expected to have a material effect on the Company’s
consolidated financial statements.

In September 2005, the Emerging Issues Task Force issued EITF No. 04-13, Accounting for Purchases and Sales of Inventory with the Same
Counterparty (“EITF 04-13”). EITF 04-13 requires that purchases and sales of inventory with the same counterparty be accounted for as a
nonmonetary transaction within


                                                                        F- 30
the scope of APB No. 29, Accounting for Nonmonetary Transactions . EITF 04-13 is effective for new arrangements entered into, or
modifications or renewals of existing arrangements, beginning in the first interim or annual reporting period beginning after March 15, 2006.
The adoption of EITF 04-13 is not expected to have a material effect on the Company’s consolidated financial statements.

3. Receivables

                                                                                                               March 31,
                                                                                                                 2006
                  Trade                                                                                        $ 76,045
                  Vendor rebates and programs                                                                      7,123
                  Related party                                                                                       14
                                                                                                                  83,182
                  Allowance for doubtful accounts                                                                   (891 )
                                                                                                               $ 82,291



Product sales resulting from transactions with a single customer were 9% during the three and six-months ended March 31, 2006, and 10% for
the three and six-months ended March 31, 2005. Approximately 10% of the Company’s trade receivables resulted from transactions with this
single customer as of March 31, 2006.

Product sales resulting from transactions with Feeders’ Advantage LLC, a related party, were 6% during the three and six-months ended
March 31, 2006, 5% during the three-months ended March 31, 2005 and 6% during the six-months ended March 31, 2005.

4. Property And Equipment

                                                                                                               March 31,
                                                                                                                 2006
                  Land                                                                                         $      —
                  Buildings and leasehold improvements                                                             1,427
                  Machinery, furniture and equipment                                                               8,466
                  Computer equipment                                                                               2,793
                  Construction in progress                                                                           463
                                                                                                                  13,149
                  Accumulated depreciation and amortization                                                       (6,851 )
                                                                                                               $ 6,298



Depreciation expense for the three-months ended March 31, 2006 and 2005 was $429 and $340, respectively, and $826 and $681 for the
six-months ended March 31, 2006 and 2005, respectively.

During the three-months ended March 31, 2006 the Company relocated from its existing, owned distribution center to a new larger leased
facility located in Denver, Colorado and sold the owned distribution center. The sale of the distribution center closed in February 2006
resulting in a gain of approximately $62 that is recorded in other income (expense) in the condensed consolidated statement of income.


                                                                        F- 31
5. Intangibles

                                                                                                                    March 31,
                                                                                               Useful Life            2006
               Amortizing:
                Customer lists                                                                    10 years           $   1,589
                Covenants not to compete                                                           5 years                 112
                Other                                                                              5 years                  36
                                                                                                                         1,737
               Accumulated amortization                                                                                   (238 )
                                                                                                                         1,499
               Non-Amortizing:
                 Trade names                                                                                                52
                                                                                                                     $   1,551



Projected amortization expense for existing intangible assets is $189 for each of the fiscal years ending 2006, 2007, 2008, and 2009 and $166
for the fiscal year ending 2010.

6. Line-Of-Credit And Long-Term Debt

Line-of-Credit — The Company has a line-of-credit agreement with two lenders for a credit facility that allows for borrowings up to $70,000.
The line-of-credit is secured by a security interest in substantially all of the Company’s assets and terminates on June 18, 2007. Interest is due
monthly at the following rates: 1) LIBOR plus a margin (6.3% at March 31, 2006); or 2) the prime rate (7.75% at March 31, 2006). The lenders
also receive an unused line fee and letter of credit fee equal to 0.375% of the unused amount of the revolving credit facility. The Company’s
outstanding balance on this facility at March 31, 2006 was $24,654. The line-of-credit contains certain restrictive financial covenants as well as
restrictions on dividend payments and future debt borrowings. The credit agreement allows the Company to issue up to $10,000 in letters of
credit. The letters of credit typically act as guarantee of payment to certain third parties in accordance with specified terms and conditions. The
Company had six letters of credit totaling $600 at March 31, 2006. There were no outstanding borrowings on these letters of credit at
March 31, 2006.

Long-Term Debt — In January 2005, the Company issued an unsecured non-negotiable promissory note in the aggregate principal amount of
$487 in partial consideration for the acquisition of a business. The note bears interest at the prime rate (7.75% at March 31, 2006), payable
quarterly. The principal of the note is payable in five equal annual installments and matures on January 1, 2010. The balance on this promissory
note was $389 at March 31, 2006.

7. Stock Options

The Company has two stock-based award plans, the 2002 Stock Option Plan and the 2005 Stock-Based Award and Incentive Compensation
Plan (the “2005 Plan”). The 2005 Plan allows the Company’s Board of Directors to grant common stock options, restricted stock, deferred units
and other stock-based awards to executives and other key employees. These plans have been developed to provide additional incentives by
allowing equity ownership in the Company and, as a result, encouraging them to contribute to its success. At March 31, 2006, the Company
had 559,048 options to purchase common stock outstanding (365,648 vested and exercisable) with a weighted average exercise price of $3.84
and expiring through September 2015. In March 2006 the Company granted 1,923 shares of restricted stock which vest annually over 5 years.
At March 31, 2006, the Company had 1,689,442 shares available to be issued under its stock-based award plans.


                                                                          F- 32
Effective October 1, 2005, the Company adopted the provisions of SFAS No. 123 R for its share-based compensation plans. The Company
previously accounted for these plans under the recognition and measurement principals of APB No. 25 and related interpretations and
disclosure requirements established by SFAS 123, as amended by SFAS No. 148. Under APB No. 25, no compensation expense was recorded
in earnings for the Company’s stock-based awards granted under the Company’s stock-based award plans. The pro forma effects on net income
and earnings per share for stock-based awards were instead disclosed in a footnote to the financial statements. Under SFAS 123 R, all
share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense in earnings over
the requisite service period.

The Company adopted SFAS 123 R using the modified prospective method. Under this transition method, compensation expense includes the
expense for all share-based awards granted prior to, but not yet vested as of October 1, 2005 excluding those options initially valued using the
minimum value method. At October 1, 2005, all of the Company’s options to purchase common stock were either vested and exercisable or
were initially valued using the minimum value method and therefore no compensation expense was recognized for these stock-based awards in
fiscal 2006. During the three and six-months ended March 31, 2006 the Company recognized $1 of compensation expense related to restricted
stock granted during the periods. During the three and six-months ended March 31, 2005, compensation expense that would have been
recorded had the Company adopted the fair value method (all of which would have been determined using the minimum value method) was not
significant.

8. Income Taxes

The Company’s effective tax rate for the three-months ended March 31, 2006 and 2005 was 39.5% and 62.6%, respectively. The Company’s
effective tax rate for the six-months ended March 31, 2006 and 2005 was 39.5% and 56.6%, respectively. The decrease in the effective rate in
the three and six-months ended March 31, 2006 as compared to the same periods in the prior year was primarily a result of the elimination of
the non-deductible accretion of dividends, recorded as interest expense, on the Series A preferred stock that was redeemed in August 2005.

9. Computation Of Earnings Per Common Share

                                                                                 Three-months ended March 31,
                                                                                  2006                    2005
                                                                           Basic       Diluted     Basic       Diluted
               Net income                                                 $ 2,355 $        2,355 $    595      $    595
               Weighted average common shares outstanding                   10,586       10,586     5,062         5,062
               Effect of diluted securities
                 Stock options and restricted stock                                            298                       317
                 Contingent stock                                                               —                        499
               Weighted average shares outstanding                                          10,884                     5,878
               Earnings per share                                         $     0.22    $     0.22    $    0.12      $ 0.10
               Anti-dilutive shares excluded from calculation                                    2                        —



                                                                        F- 33
                                                                                   Six-months ended March 31,
                                                                                   2006                    2005
                                                                            Basic       Diluted     Basic       Diluted
               Net income                                                  $ 6,794 $        6,794 $ 2,251       $ 2,251
               Weighted average common shares outstanding                    10,582       10,582     5,062         5,062
               Effect of diluted securities
                 Stock options and restricted stock                                            291                       319
                 Contingent stock                                                               —                        499
               Weighted average shares outstanding                                          10,873                     5,880
               Earnings per share                                          $    0.64    $     0.62     $    0.44     $ 0.38
               Anti-dilutive shares excluded from calculation                                    2                        —


10.   Related Parties

MWI Veterinary Supply Co. (“MWI Co.”), a subsidiary of the Company, holds a 50.0% membership interest in Feeders’ Advantage, L.L.C
(“Feeders’ Advantage”). MWI Co. charged Feeders’ Advantage for certain operating and administrative services of $126 and $87 for the
three-months ended March 31, 2006 and 2005, respectively, and $278 and $192 for the six-months ended March 31, 2006 and 2005,
respectively. Sales of products to Feeders’ Advantage were $8,001 and $6,142 for the three-months ended March 31, 2006 and 2005,
respectively, and $17,355 and $12,947 for the six-months ended March 31, 2006 and 2005, respectively.

MWI Co. provides Feeders’ Advantage with a line-of-credit to finance its day-to-day operations. This line-of-credit bears interest at the prime
rate. The interest due on the line-of-credit is calculated and charged to Feeders’ Advantage on the last day of each month. Conversely, to the
extent MWI Co. has a payable balance due to Feeders’ Advantage, the payable balance accrues interest in favor of Feeders’ Advantage at the
average federal funds rates in effect for that month.

The Company had a management and consulting services agreement with Bruckmann, Rosser, Sherrill & Co. LLC (“BRS LLC”) and Agri
Beef Co., both related parties, which was terminated in August 2005. For the three and six-months ended March 31, 2005 the Company
expensed $127 and $266 in management and other service fees under the agreement with BRS LLC and Agri Beef Co.

11. Contingencies And Commitments

From time to time, in the normal course of business, the Company may become a party to legal proceedings that may have an adverse effect on
the Company’s financial position, results of operations and cash flows. At March 31, 2006 the Company was not a party to any material
pending legal proceedings and was not aware of any claims that could have a material adverse effect on the Company’s financial position,
results of operations, or cash flows.


                                                                        F- 34
                                        MWI VETERINARY SUPPLY, INC.
                      SCHEDULE II — CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
                                             (Dollars in thousands)

                                                          Charged
                                       Balance at       (Credited) to
                                      Beginning of       Costs and      Deductions/     Balance at
                                        Period            Expenses      Write-offs     End of Period
Allowance for Doubtful Accounts
  Year ended September 30, 2005        $     565             $   978     $    (362 )    $     1,181
  Year ended September 30, 2004              544                 430          (409 )            565
  Year ended September 30, 2003              406                 345          (207 )            544



                                                     F- 35
                                                            2,987,379 Shares


                                     MWI VETERINARY SUPPLY, INC.

                                                             Common Stock




                                                             PROSPECTUS


Until                , 2006, all dealers that effect transactions in these securities, whether or not participating in this offering may be required to
deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.




                                                              Piper Jaffray
                                          Banc of America Securities LLC
                                                William Blair & Company
                                                                             , 2006
                                                                     PART II

                                           INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth all expenses other than the underwriting discount, payable by the Registrant in connection with the sale of the
common stock being registered. All amounts shown are estimates except for the SEC registration fee.

                        SEC Registration Fee                                                                 $  12,391
                        Legal Fees and Expenses                                                                325,000
                        Printing and Engraving Expenses                                                        150,000
                        Blue Sky Fees                                                                           10,000
                        NASD Fees                                                                               12,000
                        Transfer Agent’s Fees                                                                   11,000
                        Accounting Fees and Expenses                                                            75,000
                        Miscellaneous                                                                          100,000
                        Total                                                                                $ 695,391



Item 14. Indemnification of Officers and Directors.

Section 145 of the Delaware General Corporation Law, or DGCL, provides that a corporation may indemnify directors and officers as well as
other employees and individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person
is made a party by reason of such person being or having been a director, officer, employee of or agent to the Registrant. The statute provides
that it is not exclusive of other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders
or disinterested directors or otherwise.

As permitted by the DGCL, our amended and restated certificate of incorporation includes a provision that eliminates the personal liability of
our directors for monetary damages for breach of fiduciary duty as a director, except for liability (1) for any breach of the director’s duty of
loyalty to us or our stockholders; (2) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of the
law; (3) under Section 174 of the DGCL regarding unlawful dividends and stock purchases; or (4) arising as a result of any transaction from
which the director derived an improper personal benefit.

As permitted by the DGCL, our amended and restated certificate of incorporation provides that (1) we are required to indemnify our directors
and officers to the fullest extent permitted by the DGCL, subject to certain exceptions; (2) we are permitted to indemnify our other employees
and agents to the extent that we indemnify our officers and directors, unless otherwise required by law, our amended and restated certificate of
incorporation or agreements; (3) we are required to advance expenses, as incurred, to our directors and officers in connection with any legal
proceeding, subject to certain exceptions; and (4) the rights conferred in our amended and restated certificate of incorporation are not exclusive.

At present, we are not aware of any pending or threatened litigation or proceeding involving any of our directors, officers, employees or agents
in which indemnification would be required or permitted. We believe that our charter provisions and indemnification agreements are necessary
to attract and retain qualified persons as directors and officers.


                                                                          II- 1
The Underwriting Agreement (filed as Exhibit 1.1 to the Registration Statement) provides for the indemnification of our directors and officers
in certain circumstances against certain liabilities, including liabilities arising under the Securities Act.

Item 15. Recent Sales of Unregistered Securities.

Since January 2003, we have issued the following securities that were not registered under the Securities Act;

In April 2003, we sold 30,179 shares of our common stock and 142.88 shares of our Series A preferred stock to Keith Alessi, one of our
directors, for an aggregate purchase price of $148,368. The securities described in this paragraph were issued in reliance upon the exemption
from the registration requirements of the Securities Act, as set forth in Section 4(2) under the Securities Act and Rule 506 of Regulation D
promulgated thereunder relative to sales by an issuer not involving any public offering. All recipients either received adequate information
about us or had access, through employment or other relationships, to such information.

Since June 2002, we have not issued any shares of our common stock to employees, officers, directors and consultants upon the exercise of
stock options. Since June 2002, we have granted additional options to purchase 543,951 shares of our common stock under our 2002 Stock
Option Plan. The issuance of stock options and the common stock issuable upon the exercise of stock options as described in this paragraph
were issued pursuant to written compensatory plans or arrangements with our employees, officers, directors and consultants, in reliance on the
exemption provided by Rule 701 promulgated under the Securities Act or Section 4(2) of the Securities Act. All recipients either received
adequate information about us or had access, through employment or other relationships, to such information.

No underwriters were involved in the foregoing sales of securities. The purchasers in each case represented their intention to acquire the
securities for investment only and not with a view to the distribution thereof. Appropriate legends were affixed to the stock certificates issued
in such transactions. All of the foregoing securities are deemed restricted securities for the purposes of the Securities Act.

Item 16. Exhibits.

 Number                                                    Description
1.1           Form of Underwriting Agreement
 3.1           Amended and Restated Certificate of Incorporation of MWI Veterinary Supply, Inc., incorporated
               herein by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (Reg
               No. 333-124264).
 3.2           Amended and Restated Bylaws of MWI Veterinary Supply, Inc., incorporated herein by reference
               to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
 4.1           Form of MWI Veterinary Supply, Inc. common stock certificate, incorporated herein by reference
               to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).


                                                                          II- 2
4.2    Stockholders Agreement dated as of June 18, 2002 by and among MWI Holdings, Inc., Bruckmann,
       Rosser, Sherrill & Co. II, L.P., Agri Beef Co. and the other parties thereto, incorporated herein by
       reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-1 (Reg
       No. 333-124264).
4.3     Registration Rights Agreement dated as of June 18, 2002 by and between MWI Holdings, Inc.,
        Bruckmann, Rosser, Sherrill & Co. II, L.P., Agri Beef Co. and the other parties thereto,
        incorporated herein by reference to Exhibit 4.3 of the Company’s Registration Statement on
        Form S-1 (Reg No. 333-124264).
4.4     Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply Co.,
        MWI Holdings, Inc. and James Cleary, incorporated herein by reference to Exhibit 4.4 of the
        Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.5     Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply Co.,
        MWI Holdings, Inc. and Jeff Danielson, incorporated herein by reference to Exhibit 4.5 of the
        Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.6     Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply Co.,
        MWI Holdings, Inc. and James Hay, incorporated herein by reference to Exhibit 4.6 of the
        Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.7     Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply Co.,
        MWI Holdings, Inc. and James Ross, incorporated herein by reference to Exhibit 4.7 of the
        Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.8     Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply Co.,
        MWI Holdings, Inc. and Mary Pat Thompson, incorporated herein by reference to Exhibit 4.8 of
        the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.9     First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
        MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and James F. Cleary, Jr., incorporated
        herein by reference to Exhibit 4.9 of the Company’s Registration Statement on Form S-1 (Reg
        No. 333-124264).
4.10    First Amendment to Executive Stock Agreement dated as of May 5, 2005 by and among
        MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and Jeffrey J. Danielson, incorporated
        herein by reference to Exhibit 4.10 of the Company’s Registration Statement on Form S-1 (Reg
        No. 333-124264).
4.11    First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
        MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and James S. Hay, incorporated herein
        by reference to Exhibit 4.11 of the Company’s Registration Statement on Form S-1
        (Reg No. 333-124264).
4.12    First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
        MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and James M. Ross, incorporated
        herein by reference to Exhibit 4.12 of the Company’s Registration Statement on Form S-1
        (Reg No. 333-124264).
4.13    First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
        MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and Mary Patricia B. Thompson,
        incorporated herein by reference to Exhibit 4.13 of the Company’s Registration Statement on
        Form S-1 (Reg No. 333-124264).
5.1     Opinion of Dechert LLP.


                                                                 II- 3
10.1    Credit Agreement dated as of June 18, 2002 among the financial institutions from time to time
        parties thereto, Bank of America, N.A. and MWI Veterinary Supply Co., incorporated herein by
        reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-1 (Reg
        No. 333-124264).
10.2     First Amendment to Credit Agreement dated as of August 13, 2002 by and between
         MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
         reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-1
         (Reg No. 333-124264).
10.3     Second Amendment to Credit Agreement dated as of December 19, 2003 by and among
         MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
         reference to Exhibit 10.3 of the Company’s Registration Statement on Form S-1 (Reg
         No. 333-124264).
10.4     Third Amendment to Credit Agreement dated as of September 1, 2004 by and between
         MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
         reference to Exhibit 10.4 of the Company’s Registration Statement on Form S-1
         (Reg No. 333-124264).
10.5     Fourth Amendment to Credit Agreement dated as of September 28, 2004 by and among
         MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
         reference to Exhibit 10.5 of the Company’s Registration Statement on Form S-1
         (Reg No. 333-124264).
10.6     Subsidiary Borrower Joinder Agreement dated as of December 15, 2004 by Memorial Pet
         Care, Inc. and Bank of America, N.A., incorporated herein by reference to Exhibit 10.6 of the
         Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
10.7     Fifth Amendment to Credit Agreement dated as of March 28, 2005 by and among MWI Veterinary
         Supply Co. and Memorial Pet Care, Inc., the Lenders and Bank of America, N.A., incorporated
         herein by reference to Exhibit 10.14 of the Company’s Registration Statement on Form S-1 (Reg
         No. 333-124264).
10.8     Sixth Amendment to Credit Agreement, Consent and Waiver, dated as of April 20, 2005 by and
         among MWI Veterinary Supply Co. and Memorial Pet Care, Inc., the Lenders and Bank of
         America, N.A., incorporated herein by reference to Exhibit 10.15 of the Company’s Registration
         Statement on Form S-1 (Reg No. 333-124264).
10.9     Note in the amount of $45,862,069 from MWI Veterinary Supply Co. and Memorial Pet Care, Inc.
         to Bank of America, N.A. dated December 15, 2004, incorporated herein by reference to
         Exhibit 10.9 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
10.10    Note in the amount of $24,137,931 from MWI Veterinary Supply Co. and Memorial Pet Care, Inc.
         to General Electric Capital Corporation dated December 15, 2004, incorporated herein by reference
         to Exhibit 10.10 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
10.11    2002 Stock Option Plan, incorporated herein by reference to Exhibit 10.11 of the Company’s
         Registration Statement on Form S-1 (Reg No. 333-124264).
10.12    Lease Agreement dated June 20, 2003 between Rafanelli and Nahas and MWI Veterinary Supply
         Co., incorporated herein by reference to Exhibit 10.13 of the Company’s Registration Statement on
         Form S-1 (Reg No. 333-124264).


                                                                II- 4
     10.13           Ethical Distribution Agreement dated as of January 1, 2004 by and between Fort Dodge Animal
                     Health and MWI Veterinary Supply Co., as amended, incorporated herein by reference to
                     Exhibit 10.16 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
 10.14               Livestock Products Agreement effective as of January 1, 2005 by and between Pfizer Inc. and
                     MWI Veterinary Supply Co., incorporated herein by reference to Exhibit 10.17 of the Company’s
                     Registration Statement on Form S-1 (Reg No. 333-124264).
 10.15               Termination of Management and Consulting Services Agreement dated as of June 3, 2005 between
                     MWI Veterinary Supply Co., Bruckmann, Rosser, Sherrill & Co., L.L.C. and Agri Beef Co.,
                     incorporated herein by reference to Exhibit 10.18 of the Company’s Registration Statement on
                     Form S-1 (Reg No. 333-124264).
 10.16               Agreement for Product Purchases dated as of June 30, 2005 by and between MWI Veterinary
                     Supply Co. and Medical Management International, Inc., dba Banfield, The Pet Hospital®,
                     incorporated herein by reference to Exhibit 10.19 of the Company’s Registration Statement on
                     Form S-1 (Reg No. 333-124264).†
 10.17               Agreement for Logistics Services dated as of June 30, 2005 by and between MWI Veterinary
                     Supply Co. and Medical Management International, Inc., dba Banfield, The Pet Hospital®,
                     incorporated herein by reference to Exhibit 10.20 of the Company’s Registration Statement on
                     Form S-1 (Reg No. 333-124264).†
 10.18               MWI Veterinary Supply, Inc. 2005 Stock-Based Incentive Compensation Plan, adopted July 27,
                     2005, incorporated herein by reference to Exhibit 10.21 of the Company’s Registration Statement
                     on Form S-1 (Reg No. 333-124264).
 10.19               Form of Option Letter, incorporated herein by reference to Exhibit 10.22 of the Company’s
                     Registration Statement on Form S-1 (Reg No. 333-124264).
 10.20               Livestock Products Agreement effective as of January 1, 2006 by and between Pfizer Inc. and
                     MWI Veterinary Supply Co., incorporated herein by reference to Exhibit 10.1 of the Current
                     Report on Form 8-K filed on March 31, 2006.
 15                  Letter re: Unaudited Interim Financial Information.
 21.1                Subsidiaries of MWI Veterinary Supply, Inc.**
 23.1                Consent of Deloitte & Touche LLP.
 23.2                Consent of Dechert LLP (contained in Exhibit 5.1).
 24.1                Power of Attorney.**

**     Previously filed.

†                    Certain portions of the exhibit have been omitted pursuant to a confidential treatment request submitted to and approved by the SEC.

Item 17. Undertakings.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by us of expenses incurred or paid by a director, officer, or controlling person of us in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, we will,
unless in


                                                                                            II- 5
the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such
issue.

We hereby undertake that:

         (i)             for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus
                  filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the
                  Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration
                  statement as of the time it was declared effective.

         (ii)           for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a
                  form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the
                  offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.


                                                                         II- 6
                                                                SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, MWI Veterinary Supply, Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-1 and has duly caused this Amendment No. 2 to Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city of Meridian, State of Idaho, on July 18, 2006.

                                                                     MWI VETERINARY SUPPLY, INC.
                                                                         By:       /s/ JAMES F. CLEARY, JR.
                                                                             James F. Cleary, Jr., President and Chief Executive Officer
                                                                             (Principal Executive Officer)


Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 2 to Registration Statement on Form S-1 has been signed
below by the following persons on behalf of MWI Veterinary Supply, Inc. and in the capacities and on the dates indicated:

                          Signature                                                  Title                                     Date
               /s/ JAMES F. CLEARY, JR.                            Director, President and Chief Executive                 July 18, 2006
                    James F. Cleary, Jr.                            Officer (Principal Executive Officer)
          /s/ MARY PATRICIA B. THOMPSON                               Vice President, Secretary and Chief                  July 18, 2006
               Mary Patricia B. Thompson                            Financial Officer (Principal Financial
                                                                  Officer and Principal Accounting Officer)
                               *                                                   Director                                July 18, 2006
                       Keith E. Alessi
                               *                                                    Director                               July 18, 2006
                    Bruce C. Bruckmann
                               *                                                    Director                               July 18, 2006
                       A. Craig Olson
                               *                                                    Director                               July 18, 2006
                     John F. McNamara
                               *                                                    Director                               July 18, 2006
                   Robert N. Rebholtz, Jr.
      *By:      /s/ MARY PATRICIA B. THOMPSON
                           Attorney-in-Fact




                                                                         II- 7
                                                    INDEX TO EXHIBITS


Number                                                Description
1.1      Form of Underwriting Agreement
 3.1      Amended and Restated Certificate of Incorporation of MWI Veterinary Supply, Inc., incorporated
          herein by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (Reg
          No. 333-124264).
3.2       Amended and Restated Bylaws of MWI Veterinary Supply, Inc., incorporated herein by reference
          to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.1       Form of MWI Veterinary Supply, Inc. common stock certificate, incorporated herein by reference
          to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.2       Stockholders Agreement dated as of June 18, 2002 by and among MWI Holdings, Inc.,
          Bruckmann, Rosser, Sherrill & Co. II, L.P., Agri Beef Co. and the other parties thereto,
          incorporated herein by reference to Exhibit 4.2 of the Company’s Registration Statement on
          Form S-1 (Reg No. 333-124264).
4.3       Registration Rights Agreement dated as of June 18, 2002 by and between MWI Holdings, Inc.,
          Bruckmann, Rosser, Sherrill & Co. II, L.P., Agri Beef Co. and the other parties thereto,
          incorporated herein by reference to Exhibit 4.3 of the Company’s Registration Statement on
          Form S-1 (Reg No. 333-124264).
4.4       Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply
          Co., MWI Holdings, Inc. and James Cleary, incorporated herein by reference to Exhibit 4.4 of the
          Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.5       Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply
          Co., MWI Holdings, Inc. and Jeff Danielson, incorporated herein by reference to Exhibit 4.5 of
          the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.6       Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply
          Co., MWI Holdings, Inc. and James Hay, incorporated herein by reference to Exhibit 4.6 of the
          Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.7       Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply
          Co., MWI Holdings, Inc. and James Ross, incorporated herein by reference to Exhibit 4.7 of the
          Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.8       Executive Stock Agreement dated as of June 18, 2002 by and among MWI Veterinary Supply
          Co., MWI Holdings, Inc. and Mary Pat Thompson, incorporated herein by reference to Exhibit 4.8
          of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
4.9       First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
          MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and James F. Cleary, Jr., incorporated
          herein by reference to Exhibit 4.9 of the Company’s Registration Statement on Form S-1 (Reg
          No. 333-124264).
4.10      First Amendment to Executive Stock Agreement dated as of May 5, 2005 by and among
          MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and Jeffrey J. Danielson, incorporated
          herein by reference to Exhibit 4.10 of the Company’s Registration Statement on Form S-1 (Reg
          No. 333-124264).
4.11      First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
          MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and James S. Hay, incorporated herein
          by reference to Exhibit 4.11 of the Company’s Registration Statement on Form S-1
          (Reg No. 333-124264).
Number                                               Description
4.12     First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
         MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and James M. Ross, incorporated
         herein by reference to Exhibit 4.12 of the Company’s Registration Statement on Form S-1
         (Reg No. 333-124264).
4.13      First Amendment to Executive Stock Agreement dated as of May 6, 2005 by and among
          MWI Veterinary Supply, Inc., MWI Veterinary Supply Co. and Mary Patricia B. Thompson,
          incorporated herein by reference to Exhibit 4.13 of the Company’s Registration Statement on
          Form S-1 (Reg No. 333-124264).
5.1       Opinion of Dechert LLP.
10.1      Credit Agreement dated as of June 18, 2002 among the financial institutions from time to time
          parties thereto, Bank of America, N.A. and MWI Veterinary Supply Co., incorporated herein by
          reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-1 (Reg
          No. 333-124264).
10.2      First Amendment to Credit Agreement dated as of August 13, 2002 by and between
          MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
          reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-1
          (Reg No. 333-124264).
10.3      Second Amendment to Credit Agreement dated as of December 19, 2003 by and among
          MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
          reference to Exhibit 10.3 of the Company’s Registration Statement on Form S-1
          (Reg No. 333-124264).
10.4      Third Amendment to Credit Agreement dated as of September 1, 2004 by and between
          MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
          reference to Exhibit 10.4 of the Company’s Registration Statement on Form S-1
          (Reg No. 333-124264).
10.5      Fourth Amendment to Credit Agreement dated as of September 28, 2004 by and among
          MWI Veterinary Supply Co., the Lenders and Bank of America, N.A., incorporated herein by
          reference to Exhibit 10.5 of the Company’s Registration Statement on Form S-1
          (Reg No. 333-124264).
10.6      Subsidiary Borrower Joinder Agreement dated as of December 15, 2004 by Memorial Pet
          Care, Inc. and Bank of America, N.A., incorporated herein by reference to Exhibit 10.6 of the
          Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
10.7      Fifth Amendment to Credit Agreement dated as of March 28, 2005 by and among
          MWI Veterinary Supply Co. and Memorial Pet Care, Inc., the Lenders and Bank of America,
          N.A., incorporated herein by reference to Exhibit 10.14 of the Company’s Registration Statement
          on Form S-1 (Reg No. 333-124264).
10.8      Sixth Amendment to Credit Agreement, Consent and Waiver, dated as of April 20, 2005 by and
          among MWI Veterinary Supply Co. and Memorial Pet Care, Inc., the Lenders and Bank of
          America, N.A., incorporated herein by reference to Exhibit 10.15 of the Company’s Registration
          Statement on Form S-1 (Reg No. 333-124264).
10.9      Note in the amount of $45,862,069 from MWI Veterinary Supply Co. and Memorial
          Pet Care, Inc. to Bank of America, N.A. dated December 15, 2004, incorporated herein by
          reference to Exhibit 10.9 of the Company’s Registration Statement on Form S-1
          (Reg No. 333-124264).
10.10     Note in the amount of $24,137,931 from MWI Veterinary Supply Co. and Memorial Pet
          Care, Inc. to General Electric Capital Corporation dated December 15, 2004, incorporated herein
          by reference to Exhibit 10.10 of the Company’s Registration Statement on Form S-1 (Reg
          No. 333-124264).
Number                                                        Description
10.11             2002 Stock Option Plan, incorporated herein by reference to Exhibit 10.11 of the Company’s
                  Registration Statement on Form S-1 (Reg No. 333-124264).
10.12              Lease Agreement dated June 20, 2003 between Rafanelli and Nahas and MWI Veterinary Supply
                   Co., incorporated herein by reference to Exhibit 10.13 of the Company’s Registration Statement
                   on Form S-1 (Reg No. 333-124264).
10.13              Ethical Distribution Agreement dated as of January 1, 2004 by and between Fort Dodge Animal
                   Health and MWI Veterinary Supply Co., as amended, incorporated herein by reference to
                   Exhibit 10.16 of the Company’s Registration Statement on Form S-1 (Reg No. 333-124264).
10.14              Livestock Products Agreement effective as of January 1, 2005 by and between Pfizer Inc. and
                   MWI Veterinary Supply Co., incorporated herein by reference to Exhibit 10.17 of the Company’s
                   Registration Statement on Form S-1 (Reg No. 333-124264).
10.15              Termination of Management and Consulting Services Agreement dated as of June 3, 2005
                   between MWI Veterinary Supply Co., Bruckmann, Rosser, Sherrill & Co., L.L.C. and Agri Beef
                   Co., incorporated herein by reference to Exhibit 10.18 of the Company’s Registration Statement
                   on Form S-1 (Reg No. 333-124264).
10.16              Agreement for Product Purchases dated as of June 30, 2005 by and between MWI Veterinary
                   Supply Co. and Medical Management International, Inc., dba Banfield, The Pet Hospital®,
                   incorporated herein by reference to Exhibit 10.19 of the Company’s Registration Statement on
                   Form S-1 (Reg No. 333-124264).†
10.17              Agreement for Logistics Services dated as of June 30, 2005 by and between MWI Veterinary
                   Supply Co. and Medical Management International, Inc., dba Banfield, The Pet Hospital®,
                   incorporated herein by reference to Exhibit 10.20 of the Company’s Registration Statement on
                   Form S-1 (Reg No. 333-124264).†
10.18              MWI Veterinary Supply, Inc. 2005 Stock-Based Incentive Compensation Plan, adopted July 27,
                   2005, incorporated herein by reference to Exhibit 10.21 of the Company’s Registration Statement
                   on Form S-1 (Reg No. 333-124264).
10.19              Form of Option Letter, incorporated herein by reference to Exhibit 10.22 of the Company’s
                   Registration Statement on Form S-1 (Reg No. 333-124264).
10.20              Livestock Products Agreement effective as of January 1, 2006 by and between Pfizer Inc. and
                   MWI Veterinary Supply Co., incorporated herein by reference to Exhibit 10.1 of the Current
                   Report on Form 8-K filed on March 31, 2006.
15                 Letter re: Unaudited Interim Financial Information.
21.1               Subsidiaries of MWI Veterinary Supply, Inc.**
23.1               Consent of Deloitte & Touche LLP.
23.2               Consent of Dechert LLP (contained in Exhibit 5.1).
24.1               Power of Attorney.**

**   Previously filed.

†         Certain portions of the exhibit have been omitted pursuant to a confidential treatment request submitted to and approved by the SEC.
                                  Exhibit 1.1

  MWI Veterinary Supply, Inc.


         Common Stock

UNDERWRITING AGREEMENT

       dated July   , 2006


      Piper Jaffray & Co.

Banc of America Securities LLC

William Blair & Company, L.L.C.
                                                          Underwriting Agreement

July   , 2006

PIPER JAFFRAY & CO.
BANC OF AMERICA SECURITIES LLC
WILLIAM BLAIR AND COMPANY LLC
       As Representatives of the several Underwiters

c/o PIPER JAFFRAY & CO.
800 Nicollet Mall
Minneapolis, Minnesota 55402

Ladies and Gentlemen:

         Introductory . MWI Veterinary Supply, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several
underwriters named in Schedule A (the “Underwriters”) an aggregate of [                  ] shares (the “Company Shares”) of its Common Stock,
par value $0.01 per share (the “Common Stock”); the stockholders of the Company named in Schedule B (the “Selling Stockholders”) severally
propose to sell to the Underwriters an aggregate of [         ] shares of the Common Stock. The [               ] shares to be sold by the
Company and the [             ] shares to be sold by the Selling Stockholders are collectively called the “Firm Shares.” In addition, the
Company and the Selling Stockholders have granted to the Underwriters an option to purchase up to an additional [                 ] shares (the
“Optional Shares”) of Common Stock to cover over-allotments, as provided in Section 2 with each Selling Stockholder selling up to the
amount set forth opposite such Selling Stockholder’s name in Schedule B. The Firm Shares and, if and to the extent such option is exercised,
the Optional Shares are collectively called the “Shares.” Piper Jaffray & Co. (“Piper Jaffray”), Banc of America Securities LLC (“Banc of
America”) and William Blair and Company, L.L.C. (“William Blair”) have agreed to act as representatives of the several Underwriters (in such
capacity, the “Representatives”) in connection with the offering and sale of the Shares.

          The Company and the Selling Stockholders have prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-1 (File No. 333-134039), which contains a form of prospectus to be used in connection with
the public offering and sale of the Shares. Such registration statement, as amended, including the financial statements, exhibits and schedules
thereto, in the form in which it was declared effective by the Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the “Securities Act”), including any required information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is called the “Registration Statement.” Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration Statement,” and from and after the date and
time of filing of the Rule 462(b) Registration Statement the term “Registration Statement” shall include the Rule 462(b) Registration Statement.
Any preliminary
prospectus included in the Registration Statement is hereinafter called a “preliminary prospectus.” The term “Prospectus” shall mean the final
prospectus relating to the Shares that is first filed pursuant to Rule 424(b) after the date and time that this Agreement is executed and delivered
by the parties hereto (the “Execution Time”) or, if no filing pursuant to Rule 424(b) is required, shall mean the form of final prospectus relating
to the Shares included in the Registration Statement at the effective date. All references in this Agreement to the Registration Statement, the
Rule 462(b) Registration Statement, a preliminary prospectus, the Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”).

         The Company and each of the Selling Stockholders hereby confirm their respective agreements with the Underwriters as follows:

         SECTION 1. A. Representations and Warranties of the Company.

         (a) Compliance with Registration Requirements . The Registration Statement has been declared effective by the Commission under
the Securities Act. No stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose
have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission.

          Each preliminary prospectus and the Prospectus when filed complied in all material respects with the Securities Act and the rules
thereunder and, if filed by electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities
Act), was identical to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Shares. Each of the
Registration Statement and any post-effective amendment thereto, at the time it became effective and at the date hereof, complied and will
comply in all material respects with the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein not misleading. The Prospectus, as amended or
supplemented, as of its date, at the date hereof, at the time of any filing pursuant to Rule 424(b), at the Closing Date (as defined herein) and at
any Subsequent Closing Date (as defined herein), did not and will not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the
Registration Statement or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in
reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by the Representatives
expressly for use therein, it being understood and agreed that the only such information furnished by the Representatives consists of the
information described as such in Section 8 hereof. There is no contract or other document required to be described in the Prospectus or to be
filed as exhibits to the Registration Statement which has not been described or filed as required.

        (b) Disclosure Package . The term “Disclosure Package” shall mean (i) the preliminary prospectus, if any, as amended or
supplemented, (ii) the issuer free writing prospectuses as
                                                                   2
defined in Rule 433 of the Securities Act (each, an “Issuer Free Writing Prospectus”), if any, identified in Schedule C hereto, (iii) any other free
writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package and
(iv) Schedule D hereto indicating the number of Shares being sold and the price at which the Shares will be sold to the public. As of 11:29 P.M.
(Eastern time) on the date of execution and delivery of this Agreement (the “Applicable Time”), the Disclosure Package did not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the
Disclosure Package based upon and in conformity with written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8 hereof.

         (c) Company Not Ineligible Issuer . (i) At the time of filing the Registration Statement and (ii) as of the date of the execution and
delivery of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is
not an Ineligible Issuer (as defined in Rule 405 of the Securities Act), without taking account of any determination by the Commission pursuant
to Rule 405 of the Securities Act that it is not necessary that the Company be considered an Ineligible Issuer.

         (d) Issuer Free Writing Prospectuses . Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through
the completion of the offering of Shares under this Agreement or until any earlier date that the Company notified or notifies the Representatives
as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred an
event or development as a result of which such Issuer Free Writing Prospectus conflicted with the information contained in the Registration
Statement, the Company has promptly notified the Representatives and has promptly amended or supplemented, at its own expense, such Issuer
Free Writing Prospectus to eliminate or correct such conflict. The foregoing two sentences do not apply to statements in or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by any Underwriter through
the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 8 hereof.

          (e) Distribution of Offering Material by the Company . The Company has not distributed and will not distribute, prior to the later of
the last Subsequent Closing Date (as defined below) and the completion of the Underwriters’ distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than a preliminary prospectus, the Prospectus, any Issuer Free Writing Prospectus
reviewed and consented to by the Representatives or included in Schedule C hereto or the Registration Statement.

         (f) The Underwriting Agreement . This Agreement has been duly authorized, executed and delivered by the Company.

                                                                         3
         (g) Authorization of the Company Shares . The Company Shares to be purchased by the Underwriters from the Company have been
duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company to the Underwriters pursuant
to this Agreement on the Closing Date or any Subsequent Closing Date, will be validly issued, fully paid and nonassessable.

         (h) No Transfer Taxes . There are no material transfer taxes or other similar fees or charges under federal law or the laws of any state,
or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the
Company or sale by the Company of the Company Shares.

         (i) No Applicable Registration or Other Similar Rights . There are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except
for such rights as have been duly waived.

          (j) No Material Adverse Effect . Since the respective dates as of which information is given in the Disclosure Package and the
Prospectus, except as otherwise disclosed in the Disclosure Package and the Prospectus: (i) there has been no development or change that has
resulted in a material adverse effect, or any development that could reasonably be expected to result in a material adverse effect, to the
condition, financial or otherwise, or in the earnings, business, properties or operations, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as one entity (a “Material Adverse Effect”); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, nor entered into any
material transaction or agreement; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of capital stock or repurchase or redemption
by the Company or any of its subsidiaries of any class of capital stock.

         (k) Independent Accountants . Deloitte & Touche LLP, who have expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto) filed with the Commission as a part of the Registration Statement and
included in the Disclosure Package and the Prospectus, are independent public accountants with respect to the Company as required by the
Securities Act and the Exchange Act and the applicable published rules and regulations thereunder.

          (l) Preparation of the Financial Statements . The financial statements filed with the Commission as a part of the Disclosure Package
and the Registration Statement and included the Disclosure Package and the Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such
financial statements comply as to form with the applicable accounting requirements of the Securities Act and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated
in the related notes thereto. No other financial statements are required to be included in the Registration Statement. The financial data set forth
in the preliminary prospectus and the Prospectus under the captions “Summary—
                                                                          4
Summary Consolidated Financial and Operating Data,” “Selected Financial Data” and “Capitalization” fairly present the information set forth
therein on a basis consistent with that of the audited financial statements contained in the Registration Statement.

          (m) Incorporation and Good Standing of the Company and its Subsidiaries . Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has corporate
power and authority to own or lease, as the case may be, and operate its properties and to conduct its business as described in the Disclosure
Package and the Prospectus and, in the case of the Company, to enter into and perform its obligations under this Agreement. Each of the
Company and each subsidiary is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse
Effect. All of the issued and outstanding shares of capital stock of each subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim except as set forth in the Pledge Agreement, dated June 18, 2002 by and among MWI Holdings, Inc. and MWI
Veterinary Supply Co., as the Pledgors in favor of Bank of America, N.A., as agent for and representative of the Lenders under the Credit
Agreement and the Pledge Amendment, dated December 22, 2004. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in Exhibit 21 to the Registration Statement.

          (n) Capitalization and Other Capital Stock Matters . The authorized, issued and outstanding capital stock of the Company is as set
forth in the Disclosure Package and the Prospectus in the column “Actual” under the caption “Capitalization” (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the Disclosure Package and the Prospectus or upon exercise of outstanding
options described in the Disclosure Package and the Prospectus). The Common Stock (including the Shares) conforms in all material respects
to the description thereof contained in the Disclosure Package and the Prospectus. All of the issued and outstanding shares of Common Stock
(including the shares of Common Stock owned by the Selling Stockholders) have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal securities laws and in all material respects with state securities laws. None of
the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those accurately described in the Disclosure Package and the Prospectus. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the
Disclosure Package and the Prospectus accurately and fairly presents in all material respects the information required to be shown with respect
to such plans, arrangements, options and rights.

                                                                        5
      (o) Quotation . The Common Stock of the Company is registered and listed on the Nasdaq Stock Market, Inc. under the ticker symbol
“MWIV.”

          (p) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required . Neither the Company nor any of
its subsidiaries is (i) in violation or in default (or, with the giving of notice or lapse of time, would be in default) under (“Default”) its charter or
by laws, (ii) is in Default under any indenture, mortgage, loan or credit agreement, deed of trust, note, contract, franchise, lease or other
agreement, obligation, condition, covenant or instrument to which the Company or such subsidiary is a party or by which it may be bound
(including, without limitation, the Company’s Credit Agreement, dated as of June 18, 2002, by and among the Financial Institutions named
therein as the Lenders, Bank of America, N.A. as the Agent and MWI Veterinary Supply Co., as amended), or to which any of the property or
assets of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), or (iii) is in violation of any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except with respect to clauses (ii) and (iii) only,
for such violations as would not, individually or in the aggregate, result in a Material Adverse Effect. The Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated hereby and by the Disclosure Package and the Prospectus
(i) have been duly authorized by all necessary corporate action and will not result in any Default under the charter or by laws of the Company
or any subsidiary, (ii) will not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to,
any Existing Instrument, and (iii) will not result in any violation of any statute, law, regulation, order or decree applicable to the Company or
any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its subsidiaries or any of its or their properties. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery
and performance of this Agreement and consummation of the transactions contemplated hereby and by the Disclosure Package and the
Prospectus, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act, applicable
state securities or blue sky laws and from the NASD.

          (q) No Material Actions or Proceedings . Other than as disclosed in the Disclosure Package, there are no legal or governmental
actions, suits or proceedings pending or, to the Company’s knowledge, threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any officer or director of, or property owned or leased by, the Company or any of its
subsidiaries or (iii) relating to environmental or discrimination matters, where in any such case (A) there is a reasonable possibility that such
action, suit or proceeding might be determined adversely to the Company or such subsidiary and (B) any such action, suit or proceeding, if so
determined adversely, would reasonably be expected to result in a Material Adverse Effect or adversely affect the consummation of the
transactions contemplated by this Agreement.

                                                                            6
       (r) Labor Matters . No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or to the
knowledge of the Company is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, that could result in a Material Adverse Effect.

          (s) Intellectual Property Rights . The Company and its subsidiaries own, possess, license or have other rights to use, on reasonable
terms, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the
conduct of the Company’s business as now conducted or as proposed in the Disclosure Package and the Prospectus to be conducted. Except as
set forth in the Disclosure Package and the Prospectus under the caption “Business—Trademarks,” (a) no party has been granted an exclusive
license to use any portion of such Intellectual Property owned by the Company; (b) to the Company’s knowledge, there is no material
infringement by third parties of any such Intellectual Property owned by or exclusively licensed to the Company; (c) there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any material
Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (d) to the Company’s
knowledge, there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any such
Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; and (e) there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company’s business as now conducted
infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such claim.

         (t) All Necessary Permits, etc . The Company and each subsidiary possess such valid and current licenses, certificates, authorizations
or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses
except where the failure to possess such licenses, certificates, authorizations or permits that could not reasonably be expected to result in a
Material Adverse Effect, and neither the Company nor any subsidiary has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse Effect.

          (u) Title to Properties . The Company and each of its subsidiaries has good and marketable title to all the properties and assets
reflected as owned in the financial statements referred to in Section 1(i) above, in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except for such security interests, mortgages, liens, encumbrances, equities, claims or
defects that could not reasonably be expected to result in a Material Adverse Effect. The real property, improvements, equipment and personal
property held under lease by the Company or any subsidiary are held under valid and enforceable leases, with such exceptions that could not
reasonably be expected to result in a Material Adverse Effect.

                                                                         7
          (v) Tax Law Compliance . The Company and its consolidated subsidiaries have filed all necessary federal, state, local and foreign
income and franchise tax returns in a timely manner and have paid all taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them, except for any taxes, assessments, fines or penalties as may be being
contested in good faith and by appropriate proceedings and any taxes, assessments, fines or penalties that could not reasonably be expected to
result in a Material Adverse Effect. The Company has made appropriate provisions in the applicable financial statements referred to in Section
1(m) above in respect of all federal, state and foreign income and franchise taxes for all current or prior periods as to which the tax liability of
the Company or any of its consolidated subsidiaries has not been finally determined except for taxes incurred after the date of such financial
statements and taxes which if the Company failed to pay could not reasonably be expected to result in a Material Adverse Effect.

         (w) Company Not an “Investment Company.” The Company has been advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the “Investment Company Act”). The Company is not, and after receipt of payment for the Company
Shares and the application of the proceeds thereof as contemplated under “Use of Proceeds” in the Prospectus will not be, an “investment
company” within the meaning of the Investment Company Act and will conduct its business in a manner so that it will not become subject to
the Investment Company Act.

           (x) Insurance . Each of the Company and its subsidiaries are insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes. All policies of insurance insuring the Company or any of its subsidiaries
or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Company or any of its
subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of
rights clause; and neither the Company nor any such subsidiary has been refused any insurance coverage sought or applied for. The Company
has no reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire
or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Effect.

         (y) No Restrictions on Dividends . No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the Disclosure Package and the Prospectus.

          (z) No Price Stabilization or Manipulation . The Company has not taken and will not take, directly or indirectly, any action designed
to or that might be reasonably expected to cause

                                                                          8
or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares. The Company
acknowledges that the Underwriters may engage in passive market making transactions in the Shares on the Nasdaq Stock Market, Inc. in
accordance with Regulation M under the Exchange Act.

          (aa) Related Party Transactions . There are no business relationships or related-party transactions involving the Company or any
subsidiary or any other person required to be described in the Disclosure Package and the Prospectus which have not been described as
required.

          (bb) Internal Controls and Procedures . The Company is in the process of documenting and testing its internal control procedures in
order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, and will comply with Section 404 as required by the rules and
regulations of the SEC.

           (cc) Compliance with Environmental Laws . Except as otherwise disclosed in the Disclosure Package and the Prospectus (i) neither
the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign law, regulation, order, permit or other requirement
relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife, including without limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environment Concern (collectively, “Environmental Laws”), which violation includes, but is not
limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of the Company or
its subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of
its subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that
alleges that the Company or any of its subsidiaries is in violation of any Environmental Law, except as would not, individually or in the
aggregate, result in a Material Adverse Effect; (ii) there is no claim, action or cause of action filed with a court or governmental authority, no
investigation with respect to which the Company has received written notice, and no written notice by any person or entity alleging potential
liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now or in the past (collectively,
“Environmental Claims”), pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries or any person or
entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by
operation of law, except as would not, individually or in the aggregate, result in a Material Adverse Effect; (iii) to the Company’s knowledge,
there are no past, present or anticipated future actions, activities, circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of
any Environmental Law, require expenditures to be

                                                                         9
incurred pursuant to Environmental Law, or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries
or against any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed
either contractually or by operation of law, except as would not, individually or in the aggregate, result in a Material Adverse Effect; and (iv)
neither the Company nor any of its subsidiaries is subject to any pending or to the knowledge of the Company threatened proceeding under
Environmental Law to which a governmental authority is a party and which is reasonably likely to result in monetary sanctions of $100,000 or
more.

          (dd) ERISA Compliance. None of the following events has occurred or exists: (i) a failure to fulfill the obligations, if any, under the
minimum funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
and the regulations and published interpretations thereunder with respect to a Plan, determined without regard to any waiver of such obligations
or extension of any amortization period; (ii) an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state governmental agency or any foreign regulatory agency with respect to the
employment or compensation of employees by any member of the Company that could have a Material Adverse Effect on the Company; (iii)
any breach of any contractual obligation, or any violation of law or applicable qualification standards, with respect to the employment or
compensation of employees by any member of the Company that could have a Material Adverse Effect on the Company. None of the following
events has occurred or is reasonably likely to occur: (i) a material increase in the aggregate amount of contributions required to be made to all
Plans in the current fiscal year of the Company compared to the amount of such contributions made in the Company’s most recently completed
fiscal year; (ii) a material increase in the Company’s “accumulated post-retirement benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 106) compared to the amount of such obligations in the Company’s most recently completed fiscal year; (iii)
any event or condition giving rise to a liability under Title IV of ERISA that could have a Material Adverse Effect on the Company; or (iv) the
filing of a claim by one or more employees or former employees of the Company related to their employment that could have a Material
Adverse Effect on the Company. For purposes of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA)
subject to Title IV of ERISA with respect to which any member of the Company may have any liability.

         (ee) Brokers . Except as set forth in the Disclosure Package and the Prospectus, there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this
Agreement.

         (ff) No Outstanding Loans or Other Indebtedness . There are no outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of any of them, except as disclosed in the Disclosure Package and the Prospectus.

          (gg) Sarbanes-Oxley Compliance . There is and has been no failure on the part of the Company and any of the Company’s directors
or officers, in their capacities as such, to comply

                                                                        10
with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley
Act”) that are or were applicable to the Company, including Section 402 related to loans and Sections 302 and 906 related to certifications.

        (hh) Compliance with Laws . The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are
not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business,
except where failure to be so in compliance would result in a Material Adverse Effect.

        (ii) Subsidiaries . The subsidiaries listed on Annex A attached hereto are the only significant subsidiaries of the Company as defined
by Rule 1-02 of Regulation S-X (the “Subsidiaries”).

        (jj) Immunity from Jurisdiction . Neither the Company nor any of its subsidiaries nor any of its or their properties or assets has any
immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution or otherwise) under the laws of Delaware.

        Any certificate signed by an officer of the Company and delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter as to the matters set forth therein.

         B. Representations and Warranties of the Selling Stockholders . Each Selling Stockholder, severally and not jointly represents,
warrants and covenants to each Underwriter as follows:

                  (a) The Underwriting Agreement . This Agreement has been duly authorized, executed and delivered by or on behalf of such
         Selling Stockholder.

                  (b) The Custody Agreement and Power of Attorney . Certificates in negotiable form representing all of the Shares to be sold
         by such Selling Stockholder hereunder have been placed in custody under a Custody Agreement, in the form heretofore furnished to
         you (the “Custody Agreement”), duly executed and delivered by such Selling Stockholder to Wells Fargo Shareowner Services, as
         custodian (the “Custodian”), and such Selling Stockholder has duly executed and delivered a Power of Attorney, in the form
         heretofore furnished to you (the “Power of Attorney”), appointing Bruce C. Bruckmann, James F. Cleary, Jr., A. Craig Olson and
         Robert N. Rebholtz, Jr., and each of them, as such Selling Stockholder’s attorneys in fact (the “Attorneys-in-Fact”) with authority to
         execute and deliver this Agreement on behalf of such Selling Stockholder, to determine the purchase price to be paid by the
         Underwriters to the Selling Stockholders as provided in Section 2 hereof, to authorize the delivery of the Shares to be sold by such
         Selling Stockholder hereunder and otherwise to act on behalf of such Selling Stockholder in connection with the transactions
         contemplated by this Agreement and the Custody Agreement. Each of (i) the Custody Agreement signed by such Selling Stockholder
         and the Custodian, relating to the deposit of the Shares to be sold by such Selling Stockholder and (ii) the Power of Attorney of such
         Selling Stockholder has been duly authorized, executed and delivered by such Selling Stockholder.

                                                                       11
          (c) Obligations of the Selling Stockholder . The Shares represented by the certificates held in custody for such Selling
Stockholder under the Custody Agreement are subject to the interests of the Underwriters hereunder; the arrangements made by such
Selling Stockholder for such custody, and the appointment by such Selling Stockholder of the Attorneys-in-Fact by the Power of
Attorney, are to that extent irrevocable; the obligations of the Selling Stockholders hereunder shall not be terminated by operation of
law, whether by the death or incapacity of any individual Selling Stockholder or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the termination of such estate or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of any other event; if any individual Selling Stockholder or any
such executor or trustee should die or become incapacitated, or if any such estate or trust should be terminated, or if any such
partnership or corporation should be dissolved, or if any other such event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf of the Selling Stockholders in accordance with the terms and
conditions of this Agreement and of the Custody Agreements; and actions taken by the Attorneys-in-Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity, termination, dissolution or other event had not occurred, regardless of whether
or not the Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of such death, incapacity, termination,
dissolution or other event.

          (d) Title to Shares to be Sold . Such Selling Stockholder is, on the Closing Date and on any Subsequent Closing Date, the
beneficial owner of, and has good and valid title to, the Shares to be sold by such Selling Stockholder, free and clear of all liens,
encumbrances, equities or claims and has duly indorsed such Shares in blank, and assuming that the Underwriters acquire their interest
in the Shares they have purchased without notice of any adverse claim (within the meaning of Section 8-105 of the UCC), such
Underwriters that have purchased Shares delivered on the date hereof to The Depository Trust Company (“DTC”) by making payment
therefor, as provided herein, and that have had such Shares credited to the securities account or accounts of such Underwriters
maintained with DTC will have acquired a security entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to such
Shares purchased by such Underwriters.

          (e) All Authorizations Obtained . Such Selling Stockholder has the legal right and power, and all authorizations and
approvals required by law and under its charter or by-laws, partnership agreement, trust agreement or other organizational documents
(if applicable) to enter into this Agreement and its Custody Agreement and Power of Attorney, to sell, transfer and deliver all of the
Shares which may be sold by such Selling Stockholder pursuant to this Agreement and to comply with its other obligations hereunder
and thereunder.

         (f) Delivery of the Shares to be Sold . Delivery of the Shares which are sold by such Selling Stockholder pursuant to this
Agreement will pass good and valid title to such Shares, free and clear of any security interest, mortgage, pledge, lien, encumbrance or
other claim.

                                                               12
         (g) Non-Contravention; No Further Authorizations or Approvals Required . The execution and delivery by such Selling
Stockholder of, and the performance by such Selling Stockholder of its obligations under, this Agreement, the Custody Agreement and
the Power of Attorney (i) will not result in any Default under, or require the consent of any other party to, the charter or by-laws,
partnership agreement, trust agreement or other organizational documents of such Selling Stockholder, (ii) will not conflict with or
constitute a breach of, or Default under, any other agreement or instrument to which such Selling Stockholder is a party or by which it
is bound or under which it is entitled to any right or benefit, except any such conflict, breach or Default as would not adversely affect
such Selling Stockholder’s ability to perform any of its obligations under this Agreement, the Custody Agreement and the Power of
Attorney or any of the transactions contemplated hereby or thereby, and (iii) will not result in any violation of any statute, law,
regulation, order or decree applicable to such Selling Stockholder of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over such Selling Stockholder or its properties. No consent, approval,
authorization or other order of, or registration or filing with, any court or other governmental authority or agency, is required for the
consummation by such Selling Stockholder of the transactions contemplated in this Agreement, except such as have been obtained or
made and are in full force and effect under the Securities Act, applicable state securities or blue sky laws and from the NASD.

         (h) No Registration or Other Similar Rights . Such Selling Stockholder does not have any registration or other similar rights
to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as are described in the Prospectus and have been waived in writing in
connection with the offering contemplated hereby.

          (i) No Further Consents, etc . Except for the (i) exercise by such Selling Stockholder of certain registration rights pursuant
to the Registration Rights Agreement dated as of June 18, 2002 (the “Registration Rights Agreement”) (which registration rights have
been duly exercised pursuant thereto), (ii) consent of such Selling Stockholder to the respective number of Shares to be sold by all of
the Selling Stockholders pursuant to this Agreement and (iii) waiver by certain other holders of Common Stock of certain registration
rights pursuant to such Registration Rights Agreement, no consent, approval or waiver is required under any instrument or agreement
to which such Selling Stockholder is a party or by which it is bound or under which it is entitled to any right or benefit, in connection
with the offering, sale or purchase by the Underwriters of any of the Shares which may be sold by such Selling Stockholder under this
Agreement or the consummation by such Selling Stockholder of any of the other transactions contemplated hereby.

         (j) Disclosure Made by Such Selling Stockholder in the Prospectus . All information furnished by or on behalf of such
Selling Stockholder in writing expressly for use in the Registration Statement, the Prospectus or any free writing prospectus as defined
in Rule 405 of the Securities Act (“Free Writing Prospectus”) or any amendment or supplement thereto used by the Company or any
Underwriter, as the case may be, is,

                                                               13
         as of the Applicable Time, and on the Closing Date and any Subsequent Closing Date will be, true, correct and complete in all
         material respects, and as of the Applicable Time does not, and on the Closing Date and any Subsequent Closing Date will not, contain
         any untrue statement of a material fact or omit to state any material fact necessary to make such information not misleading. In
         addition, such Selling Stockholder confirms as accurate the number of shares of Common Stock set forth opposite such Selling
         Stockholder’s name in the preliminary prospectus and the Prospectus under the caption “Principal Stockholders” (both prior to and
         after giving effect to the sale of the Shares).

                  (k) No Price Stabilization or Manipulation . Such Selling Stockholder has not taken and will not take, directly or indirectly,
         any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of any
         security of the Company to facilitate the sale or resale of the Shares.

                   (l) No Inside Information . Such Selling Stockholder is not aware of any material information concerning the Company that
         is not set forth in the Registration Statement and the Disclosure Package and which has prompted such Selling Stockholder to sell
         shares of Common Stock.

                  (m) No Free Writing Prospectuses . Such Selling Stockholder represents that it has not prepared or had prepared on its
         behalf or used or referred to, any Free Writing Prospectus, and represents that it has not distributed any written materials in connection
         with the offer or sale of the Securities.

         Any certificate signed by or on behalf of any Selling Stockholder and delivered to the Representatives or to counsel for the
Underwriters shall be deemed to be a representation and warranty by such Selling Stockholder to each Underwriter as to the matters covered
thereby.

         SECTION 2. Purchase, Sale and Delivery of the Shares.

          (a) The Firm Shares . Upon the terms herein set forth, (i) the Company agrees to issue and sell to the several Underwriters an
aggregate of [ ] Firm Shares and (ii) the Selling Stockholders agree to sell to the several Underwriters an aggregate of [    ] Firm Shares,
each Selling Stockholder selling up to the number of Firm Shares set forth opposite such Selling Stockholder’s name on Schedule B. On the
basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company and the Selling Stockholders up to the respective number of Firm
Shares set forth opposite their names on Schedule A. The purchase price per Firm Common Share to be paid by the several Underwriters to the
Company shall be $[       ] per share.

         (b) The Closing Date . Delivery of certificates for the Firm Shares to be purchased by the Underwriters and payment therefor shall be
made at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, NY 10022 (or such other place as may be agreed to by the
Company and the Representatives) at 9:00 A.M. New York City time, on July [ ], 2006, or such other time and date not later than 1:30 P.M.
New York City time, on July [ ], 2006, as the Representatives shall designate by notice to the Company (the time and date of such closing are

                                                                        14
called the “Closing Date”). The Company hereby acknowledges that circumstances under which the Representatives may provide notice to
postpone the Closing Date as originally scheduled include, but are in no way limited to, any determination by the Company or the
Representatives to recirculate to the public copies of an amended or supplemented Prospectus or a delay as contemplated by the provisions of
Section 10.

          (c) The Optional Shares; the Subsequent Closing Date . In addition, on the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set forth, the Company and the Selling Stockholders hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to an aggregate of [         ] Optional Shares from the Company and
such Selling Stockholder at the purchase price per share to be paid by the Underwriters for the Firm Shares. The option granted hereunder may
be exercised at any time and from time to time only for the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Firm Shares upon notice by the Representatives to the Company and the Selling Stockholders, which notice
may be given at any time within 30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate number of Optional
Shares as to which the Underwriters are exercising the option, (ii) the names and denominations in which the certificates for the Optional
Shares are to be registered and (iii) the time, date and place at which such certificates will be delivered (which time and date may be
simultaneous with, but not earlier than, the Closing Date; and in such case the term “Closing Date” shall refer to the time and date of delivery
of certificates for the Firm Shares and the Optional Shares). Each time and date of delivery, if subsequent to the Closing Date, is called a
“Subsequent Closing Date” and shall be determined by the Representatives and shall not be earlier than three nor later than five full business
days after delivery of such notice of exercise. If any Optional Shares are to be purchased, (a) each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine)
that bears the same proportion to the total number of Optional Shares to be purchased as the number of Firm Shares set forth on Schedule A
opposite the name of such Underwriter bears to the total number of Firm Shares and (b) the Company and each Selling Stockholder agrees,
severally and not jointly, to sell the number of Optional Shares (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total number of Optional Shares to be sold as the number of Optional
Shares set forth in Schedule B opposite the name of such Selling Stockholder (or, in the case of the Company, as the number of Optional
Shares to be sold by the Company as set forth in the paragraph “Introductory” of this Agreement) bears to the total number of Optional Shares.

        (d) Public Offering of the Shares . The Representatives hereby advise the Company and the Selling Stockholders that the
Underwriters intend to offer for sale to the public, as described in the Prospectus, their respective portions of the Shares as soon after this
Agreement has been executed and the Registration Statement has been declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.

         (e) Payment for the Shares . Payment for the Shares to be sold by the Company shall be made at the Closing Date (and, if applicable,
at any Subsequent Closing Date) by wire transfer of immediately available funds to the order of the Company. Payment for the Shares to be
sold by

                                                                        15
the Selling Stockholders shall be made at the Closing Date (and, if applicable, at any Subsequent Closing Date) by wire transfer of immediately
available funds to the order of the Custodian.

         It is understood that the Representatives have been authorized, for its own account and the accounts of the several Underwriters, to
accept delivery of and receipt for, and make payment of the purchase price for, the Firm Shares and any Optional Shares the Underwriters have
agreed to purchase. Piper Jaffray, individually and not as the Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Shares to be purchased by any Underwriter whose funds shall not have been received by the Representatives by the Closing
Date or any Subsequent Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.

         Each Selling Stockholder hereby agrees that it will pay all stock transfer taxes, stamp duties and other similar taxes, if any, payable
upon the sale or delivery of the Shares to be sold by such Selling Stockholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Stockholder’s obligations hereunder.

         (f) Delivery of the Shares . Delivery of the Firm Shares and the Optional Shares shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the Underwriters.

           (g) Delivery of Prospectus to the Underwriters . Not later than 10:00 a.m. on the second business day following the date the Shares
are first released by the Underwriters for sale to the public, the Company shall deliver or cause to be delivered, copies of the Prospectus in such
quantities and at such places as the Representatives shall request.

         SECTION 3. Additional Covenants of the Company .

         A. Covenants of the Company . The Company further covenants and agrees with each Underwriter as follows:

                  (a) Representatives’ Review of Proposed Amendments and Supplements . During the period beginning on the Applicable
         Time and ending on the later of the Closing Date or such date, as in the opinion of counsel for the Underwriters, the Prospectus is no
         longer required by law to be delivered in connection with sales by an Underwriter or dealer, including in circumstances where such
         requirement may be satisfied pursuant to Rule 172 (the “Prospectus Delivery Period”), prior to amending or supplementing the
         Registration Statement, the Disclosure Package or the Prospectus, the Company shall furnish to the Representatives for review a copy
         of each such proposed amendment or supplement, and the Company shall not file or use any such proposed amendment or supplement
         to which the Representatives reasonably objects.

                   (b) Securities Act Compliance . After the date of this Agreement, the Company shall promptly advise the Representatives in
         writing (i) when the Registration Statement, if not effective at the Execution Time, shall have become effective, (ii) of the receipt of
         any comments of, or requests for additional or supplemental information from, the Commission, (iii) of the time and date of any filing
         of any post-effective amendment to

                                                                        16
the Registration Statement or any amendment or supplement to any preliminary prospectus or the Prospectus, (iv) of the time and date
that any post-effective amendment to the Registration Statement becomes effective and (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of the
Registration Statement, any preliminary prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of such purposes. The Company shall use reasonable efforts to
prevent the issuance of any such stop order or suspension of such use. If the Commission shall enter any such stop order at any time,
the Company will use reasonable efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b) and 430A, as applicable, under the Securities Act, including with
respect to the timely filing of documents thereunder, and will use its reasonable efforts to confirm that any filings made by the
Company under such Rule 424(b) were received in a timely manner by the Commission.

         (c) Exchange Act Compliance . During the Prospectus Delivery Period, the Company will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within the time periods required by
the Exchange Act.

         (d) Amendments and Supplements to the Registration Statement, Disclosure Package and Prospectus and Other Securities
Act Matters . If, during the Prospectus Delivery Period, any event or development shall occur or condition exist as a result of which
the Disclosure Package or the Prospectus as then amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements therein in light of the circumstances under which they were
made not misleading, or if it shall be necessary to amend or supplement the Disclosure Package or the Prospectus in order to make the
statements therein, in the light of the circumstances under which they were made not misleading, or if in the opinion of the
Representatives it is otherwise necessary to amend or supplement the Registration Statement, the Disclosure Package or the
Prospectus or to file a new registration statement containing the Prospectus in order to comply with law, including in connection with
the delivery of the Prospectus, the Company agrees to (i) notify the Representatives of any such event or condition and (ii) promptly
prepare (subject to Section 3(a) hereof), file with the Commission and furnish at its own expense to the Underwriters and to dealers,
amendments or supplements to the Registration Statement, the Disclosure Package, or the Prospectus necessary in order to make the
statements in the Disclosure Package or the Prospectus as so amended or supplemented, in the light of the circumstances under which
they were made not misleading or so that the Registration Statement, the Disclosure Package or the Prospectus, as amended or
supplemented, will comply with law.

          (e) Permitted Free Writing Prospectuses . The Company represents that it has not made, and agrees that, unless it obtains
the prior written consent of the Representatives, it

                                                              17
will not make, any offer relating to the Shares that constitutes or would constitute an Issuer Free Writing Prospectus or that otherwise
constitutes or would constitute a “free writing prospectus” (as defined in Rule 405 of the Securities Act) or a portion thereof required
to be filed by the Company with the Commission or retained by the Company under Rule 433 of the Securities Act; provided that the
prior written consent of the Representatives hereto shall be deemed to have been given in respect of the Free Writing Prospectuses
included in Schedule C hereto. Any such free writing prospectus consented to by the Representatives is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted
Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 of the Securities Act applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.

         (f) Copies of any Amendments and Supplements to the Prospectus . The Company agrees to furnish the Representatives,
without charge, during the Prospectus Delivery Period, as many copies of the Prospectus and any amendments and supplements
thereto and the Disclosure Package as the Representatives may request.

         (g) Copies of the Registration Statement and the Prospectus . The Company will furnish to the Representatives and counsel
for the Underwriters signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus
by an Underwriter or dealer may be required by the Act, as many copies of each preliminary prospectus and the Prospectus and any
supplement thereto and the Disclosure Package as the Representatives may reasonably request.

         (h) Blue Sky Compliance . The Company shall cooperate with the Representatives and counsel for the Underwriters to
qualify or register the Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws or
Canadian provincial Securities laws of those jurisdictions designated by the Representatives, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Shares. The
Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation,
other than those arising out of the offering or sale of the Shares in any jurisdiction where it is not now so subject. The Company will
advise the Representatives promptly of the suspension of the qualification or registration of (or any such exemption relating to) the
Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to
obtain the withdrawal thereof at the earliest possible moment.

         (i) Use of Proceeds . The Company shall apply the net proceeds from the sale of the Shares sold by it in the manner
described under the caption “Use of Proceeds” in the Disclosure Package and the Prospectus.

                                                               18
         (j) Transfer Agent . The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Common
Stock.

           (k) Earnings Statement . As soon as practicable, the Company will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited) covering the twelve-month period ending June 30, 2006 that
satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act.

         (l) Periodic Reporting Obligations . During the Prospectus Delivery Period the Company shall file, on a timely basis, with
the Commission and the Nasdaq Stock Market, Inc. all reports and documents required to be filed under the Exchange Act.
Additionally, the Company shall report the use of proceeds from the issuance of the Shares as may be required under Rule 463 under
the Securities Act.

         (m) Quotation . The Company will use its best efforts to quote, subject to notice of issuance, the Shares on the Nasdaq Stock
Market, Inc.

          (n) Agreement Not to Offer or Sell Additional Shares . During the period commencing on the date hereof and ending on the
90th day following the date of the Prospectus, the Company will not, without the prior written consent of the Representatives (which
consent may be withheld at the sole discretion of the Representatives), directly or indirectly, sell, offer, contract or grant any option to
sell, pledge, transfer or establish an open “put equivalent position” or liquidate or decrease a “call equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition of), or announce the offering of, or file any registration statement
under the Securities Act in respect of, any shares of Common Stock, options or warrants to acquire shares of the Common Stock or
securities exchangeable or exercisable for or convertible into shares of Common Stock (other than as contemplated by this Agreement
with respect to the Shares); provided , however , that the Company may issue shares of its Common Stock or options to purchase its
Common Stock, or Common Stock upon exercise of options, pursuant to any stock option, stock bonus or other stock plan or
arrangement described in the Prospectus, but only if the holders of such shares, options, or shares issued upon exercise of such
options, agree in writing not to sell, offer, dispose of or otherwise transfer any such shares or options during such 90-day period
without the prior written consent of the Representatives (which consent may be withheld at the sole discretion of the Representatives).
Notwithstanding the foregoing, if (x) during the last 17 days of the 90-day restricted period the Company issues an earnings release or
material news or a material event relating to the Company occurs, or (y) prior to the expiration of the 90-day restricted period, the
Company announces that it will release earnings results during the 16-day period beginning on the last day of the 90-day period, the
restrictions imposed in this clause shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event. The Company will provide the Representatives and any
co-managers and each individual subject to the restricted period pursuant to the lockup letters described in Section 5(k)

                                                                19
with prior notice of any such announcement that gives rise to an extension of the restricted period.

         (o) Compliance with Sarbanes-Oxley Act . The Company will comply in all material respects with all applicable securities
and other laws, rules and regulations, including, without limitation, the Sarbanes-Oxley Act, and use its best efforts to cause the
Company’s directors and officers, in their capacities as such, to comply in all material respects with such laws, rules and regulations,
including, without limitation, the provisions of the Sarbanes-Oxley Act.

          (p) Investment Limitation . The Company shall not invest, or otherwise use the proceeds received by the Company from its
sale of the Shares in such a manner as would require the Company or any of its subsidiaries to register as an investment company
under the Investment Company Act.

          (q) No Manipulation of Price . The Company will not take, directly or indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to constitute, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any securities of the Company to facilitate the sale or resale of the Shares.

         (r) Existing Lock-Up Agreement . The Company will enforce all existing agreements between the Company and any of its
security holders that prohibit the sale, transfer, assignment, pledge or hypothecation of any of the Company’s securities in connection
with the Company’s initial public offering. In addition, the Company will direct the transfer agent to place stop transfer restrictions
upon any such securities of the Company that are bound by such existing “lock-up” agreements for the duration of the periods
contemplated in such agreements.

B. Covenants of the Selling Stockholders . Each Selling Stockholder further covenants and agrees with each Underwriter:

          (a) Agreement Not to Offer or Sell Additional Shares . Such Selling Stockholder will not, without the prior written consent
of the Representatives (which consent may be withheld at the sole discretion of the Representatives), directly or indirectly, sell, offer,
contract or grant any option to sell (including without limitation any short sale), pledge, transfer, establish an open “put equivalent
position” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the
disposition of) any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or hereafter owned beneficially (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) by the undersigned, or publicly announce the undersigned’s intention to do any of
the foregoing, for a period commencing on the date hereof and continuing through the close of trading on the date 90 days after the
date of the Prospectus. In addition, such Selling Stockholder agrees that, without the prior written

                                                               20
         consent of the Representatives, it will not, during the period commencing on the date hereof and ending 90 days after the date of the
         Prospectus, make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible into
         or exercisable or exchangeable for Shares. Notwithstanding the foregoing, if (x) during the last 17 days of the 90-day restricted period
         the Company issues an earnings release or material news or a material event relating to the Company occurs, or (y) prior to the
         expiration of the 90-day restricted period, the Company announces that it will release earnings results during the 16-day period
         beginning on the last day of the 90-day period, the restrictions imposed in this clause shall continue to apply until the expiration of the
         18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. The
         Company will provide the Representatives and any co-managers and each individual subject to the restricted period pursuant to the
         lockup letters described in Section 5(k) with prior notice of any such announcement that gives rise to an extension of the restricted
         period.

                  (b) Delivery of Forms W-8 and W-9 . To deliver to the Representatives prior to the Closing Date a properly completed and
         executed United States Treasury Department Form W-8 (if the Selling Stockholder is a non-United States person) or Form W-9 (if the
         Selling Stockholder is a United States Person).

                   (c) Notification of Material Changes . During the Prospectus Delivery Period, such Selling Stockholder will the
         Representatives promptly, and if requested by the Representatives, will confirm such advice in writing, of (i) any Material Adverse
         Change, (ii) any change in information in the Registration Statement, the Prospectus or any Free Writing Prospectus or any
         amendment or supplement thereto relating to such Selling Stockholder or (iii) any new material information relating to the Company
         or relating to any matter stated in the Prospectus or any Free Writing Prospectus or any amendment or supplement thereto which
         comes to the attention of such Selling Stockholder.

                   (d) No Free Writing Prospectuses . Such Selling Stockholder agrees that it will not prepare or have prepared on its behalf or
         use or refer to, any Free Writing Prospectus, and agrees that it will not distribute any written materials in connection with the offer or
         sale of the Securities.

         The Representatives, on behalf of the several Underwriters, may, in its sole discretion, waive in writing the performance by the
Company or any Selling Stockholder of any one or more of the foregoing covenants or extend the time for their performance. Notwithstanding
the foregoing, The Representatives, for the benefit of each of the other Underwriters, agrees not to consent to any action proposed to be taken
by the Company, any Selling Stockholder or any other holder of the Company’s securities that would otherwise be prohibited by, or to waive
compliance by the Company, any Selling Stockholder or any such other security holder with the provisions of, Section 3(A)(n) or 3(B)(a)
above or any lock-up agreement delivered pursuant to Section 5(k) below without giving each of the other Underwriters at least 17 days prior
notice (or such shorter notice as each of the other Underwriters may deem acceptable to permit compliance with applicable provisions of
NASD Conduct Rule 2711(f) restricting publication and distribution of research and public appearances by research analysts before and after
the expiration, waiver or termination of a lock-up agreement).

                                                                        21
          SECTION 4. Payment of Expenses . The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Shares (including all printing and engraving costs), (ii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Shares, (iii) all
fees and expenses of the registrar and transfer agent of the Common Stock, (iv) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Shares to the Underwriters, (v) all fees and expenses of the Company’s counsel, independent public or
certified public accountants and other advisors, (vi) all costs and expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), each
Issuer Free Writing Prospectus, each preliminary prospectus and the Prospectus, and all amendments and supplements thereto, and this
Agreement, (vii) all filing fees, reasonable attorneys’ fees and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Shares for offer and sale under
the state securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the Representatives, preparing and printing
a “Blue Sky Survey” or memorandum, and any supplements thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (viii) the filing fees incident to, and the reasonable fees and expenses of counsel for the Underwriters in connection with, the
NASD’s review and approval of the Underwriters’ participation in the offering and distribution of the Shares, (ix) the fees and expenses
associated with quotation of the Shares on the Nasdaq Stock Market, Inc., and (x) all other fees, costs and expenses referred to in Item 13 of
Part II of the Registration Statement. Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.

          The Selling Stockholders further agree with each Underwriter to pay (directly or by reimbursement) all fees and expenses incident to
the performance of their obligations under this Agreement which are not otherwise specifically provided for herein, including but not limited to
(i) fees and expenses of counsel and other advisors for such Selling Stockholders, (ii) fees and expenses of the Custodian and (iii) expenses and
taxes incident to the sale and delivery of the Shares to be sold by such Selling Stockholders to the Underwriters hereunder (which taxes, if any,
may be deducted by the Custodian under the provisions of Section 2 of this Agreement).

      This Section 4 shall not affect or modify any separate, valid agreement relating to the allocation of payment of expenses between the
Company, on the one hand, and the Selling Stockholders, on the other hand.

         SECTION 5 . Conditions of the Obligations of the Underwriters . The obligations of the several Underwriters to purchase and pay for
the Shares as provided herein on the Closing Date and, with respect to the Optional Shares, any Subsequent Closing Date, shall be subject to
the accuracy of the representations and warranties on the part of the Company and the Selling Stockholders set forth in Section 1(A) and 1(B),
respectively, hereof as of the date hereof and as of the Closing Date as though then made and, with respect to the Optional Shares, as of any
Subsequent Closing Date as though then made, to the accuracy of the statements of the Company

                                                                        22
made in any certificates pursuant to the provisions hereof, to the timely performance by the Company and the Selling Stockholders of their
respective covenants and other obligations hereunder, and to each of the following additional conditions:

                 (a) Accountants’ Comfort Letter . On the date hereof, the Representatives shall have received from Deloitte & Touche LLP,
        independent public accountants for the Company, a letter dated the date hereof addressed to the Underwriters, the form of which is
        attached as Exhibit A , confirming, among other things, that they are independent accountants within the meaning of the Securities Act
        and the applicable rules and regulations adopted by the Commission thereunder, that they have performed an audit of the Company’s
        financial statements for the years indicated in their audit report and that they have performed a review of the unaudited interim
        financial information of the Company for the six-month period ended [ ], 2006 and as at [         ], 2006, in accordance with Statement
        on Auditing Standards No. 100.

                 (b) Compliance with Registration Requirements; No Stop Order; No Objection from NASD . For the period from and after
        effectiveness of this Agreement and prior to the Closing Date and, with respect to the Optional Shares, any Subsequent Closing Date:

                           (i)     the Company shall have filed the Prospectus with the Commission (including the information required by
                 Rule 430A under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities
                 Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information
                 required by such Rule 430A, and such post-effective amendment shall have become effective;

                         (ii)       all material required to be filed by the Company pursuant to Rule 433(d) under the Securities Act shall
                 have been filed with the Commission within the applicable time periods prescribed for such filings under Rule 433;

                          (iii)      no stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment
                 to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened
                 by the Commission; and

                         (iv)        the NASD shall have raised no objection to the fairness and reasonableness of the underwriting terms and
                 arrangements.

                 (c) No Material Adverse Effect . For the period from and after the date of this Agreement and prior to the Closing Date and,
        with respect to the Optional Shares, any Subsequent Closing Date:

                          (i)        in the reasonable judgment of the Representatives there shall not have occurred any Material Adverse
                 Effect; and

                           (ii)       there shall not have been any change or decrease specified in the letter or letters referred to in paragraph
                 (a) of this Section 5 which is, in the reasonable judgment of the Representatives, so material and adverse as to make it

                                                                        23
         impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Registration
         Statement and the Prospectus.

         (d) Opinion of Counsel for the Company . On each of the Closing Date and any Subsequent Closing Date, the
Representatives shall have received the favorable opinion of Dechert LLP, counsel for the Company, dated as of such Closing Date,
the form of which is attached as Exhibit B .

        (e) Opinion of Counsel for the Underwriters . On each of the Closing Date and any Subsequent Closing Date, the
Representatives shall have received the favorable opinion of Shearman & Sterling LLP, counsel for the Underwriters, dated as of such
Closing Date, in a form satisfactory to the Representatives.

         (f) Officers’ Certificate . On each of the Closing Date and any Subsequent Closing Date, the Representatives shall have
received a written certificate executed by the Chairman of the Board, Chief Executive Officer or President of the Company and the
Chief Financial Officer or Chief Accounting Officer of the Company, dated as of such Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration Statement, the Prospectus, and any amendment or supplement thereto, any
Issuer Free Writing Prospectus and any amendment or supplement thereto, and this Agreement, to the effect set forth in subsections
(b) and (c) of this Section 5, and further to the effect that:

                 (i)       for the period from and after the date of this Agreement and prior to such Closing Date, there has not
         occurred any Material Adverse Effect;

                   (ii)      the representations, warranties and covenants of the Company set forth in Section 1(A) of this Agreement
         are true and correct on and as of the Closing Date with the same force and effect as though expressly made on and as of such
         Closing Date; and

                  (iii)     the Company has complied with all the agreements hereunder and satisfied all the conditions on its part to
         be performed or satisfied hereunder at or prior to such Closing Date.

         (g) Bring-down Comfort Letter . On each of the Closing Date and any Subsequent Closing Date, the Representatives shall
have received from Deloitte & Touche LLP, independent public accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished by them
pursuant to subsection (a) of this Section 5, except that the specified date referred to therein for the carrying out of procedures shall be
no more than three business days prior to the Closing Date or Subsequent Closing Date, as the case may be.

        (h) Opinion of Counsel for the Selling Stockholders . On the Closing Date and any Subsequent Closing Date, the
Representatives shall have received the favorable opinion of Dechert LLP, counsel for the Selling Stockholders, dated as of such
Closing Date, the form of which is attached as Exhibit C.

                                                                24
                  (i) Selling Stockholders’ Certificate . On the Closing Date and any Subsequent Closing Date, the Representatives shall
         receive a written certificate executed by the Attorney-in-Fact of each Selling Stockholder, dated as of such Closing Date, to the effect
         that:

                            (i)      the signer[s] of such certificate have carefully examined the Registration Statement, the Prospectus, any
                  Issuer Free Writing Prospectus and any amendment or supplement thereto and this Agreement, and that the representations,
                  warranties and covenants of such Selling Stockholder set forth in Section 1(B) of this Agreement are true and correct on and
                  as of the Closing Date with the same force and effect as though expressly made by such Selling Stockholder on and as of
                  such Closing Date; and

                           (ii)      such Selling Stockholder has complied with all the agreements and satisfied all the conditions on its part
                  to be performed or satisfied at or prior to such Closing Date.

                 (j) Selling Stockholders’ Documents . On the date hereof, the Company and the Selling Stockholders shall have furnished for
         review by the Representatives copies of the Powers of Attorney and Custody Agreements executed by each of the Selling
         Stockholders and such further information, certificates and documents as the Representatives may reasonably request.

                  (k) Lock-Up Agreement from Certain Securityholders of the Company . On or prior to the date hereof, the Company shall
         have furnished to the Representatives an agreement in the form of Exhibit D hereto from each director, officer and each beneficial
         owner of Common Stock listed on Exhibit E hereto (as defined and determined according to Rule 13d-3 under the Exchange Act,
         except that a 90-day period shall be used rather than the 60-day period set forth therein, and such agreement shall be in full force and
         effect on each of the Closing Date and any Subsequent Closing Date.

                  (l) Listing of Shares . At the Closing Date, the Company shall have submitted to the Nasdaq Stock Market, Inc. (the
         “NASDAQ”) a Notification Form: Listing of Additional Shares (the “Notification”) related to the Securities and such Notification
         shall have been verbally approved by the NASDAQ.

                 (m) Additional Documents . On or before each of the Closing Date and any Subsequent Closing Date, the Representatives
         and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably require for the
         purposes of enabling them to pass upon the issuance and sale of the Shares as contemplated herein, or in order to evidence the
         accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

        If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by
the Representatives by notice to the Company and the Selling Stockholders at any time on or prior to the Closing Date and, with respect to the

                                                                        25
Optional Shares, at any time prior to the applicable Subsequent Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times be effective and shall survive such
termination.

         SECTION 6. Reimbursement of Underwriters’ Expenses . If this Agreement is terminated by the Representatives pursuant to Section
5, or Section 11, or if the sale to the Underwriters of the Shares on the Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company or the Selling Stockholders to perform any agreement herein or to comply with any provision hereof, the
Company agrees to reimburse the Representatives and the other Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Representatives
and the Underwriters in connection with the proposed purchase and the offering and sale of the Shares, including but not limited to reasonable
fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.

         SECTION 7. Effectiveness of this Agreement . This Agreement shall not become effective until the later of (i) the execution of this
Agreement by the parties hereto and (ii) notification by the Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.

         Prior to such effectiveness, this Agreement may be terminated by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the Selling Stockholders to any Underwriter, except that the Company
and the Selling Stockholders shall be obligated to reimburse the expenses of the Representatives and the Underwriters pursuant to Section 4
hereof or (b) of any Underwriter to the Company or the Selling Stockholders.

         SECTION 8. Indemnification .

         (a) Indemnification of the Underwriters . The Company and each of the Selling Stockholders severally and not jointly agree to
indemnify and hold harmless each Underwriter, its directors, officers, employees and agents, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which such Underwriter or such controlling person may become subject, insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule
430A, Rule 430B or Rule 430C under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (ii) upon any untrue statement or alleged untrue statement of a material
fact contained in any Issuer Free Writing Prospectus, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and to reimburse each Underwriter,

                                                                       26
its officers, directors, employees, agents and each such controlling person for any and all expenses (including the fees and disbursements of
counsel chosen by the Representatives) as such expenses are reasonably incurred by such Underwriter, or its officers, directors, employees and
agents or such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided , however , that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written information furnished to the Company or the Selling Stockholders by
the Representatives expressly for use in the Registration Statement, any Issuer Free Writing Prospectus, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided , further , that with respect to any untrue statement or omission of material
fact made in the Disclosure Package, the foregoing indemnity agreement shall not inure to the benefit of any Underwriter from whom the
person asserting any loss, claim, damage, liability or expense purchased Shares, or any person controlling such Underwriter, if copies of a
Preliminary Prospectus or a Free Writing Prospectus were delivered to the Underwriter pursuant to Section 3A at least two business days prior
to the Applicable Time and a copy of such Preliminary Prospectus or Free Writing Prospectus was not sent or given by or on behalf of such
Underwriter to such person at or prior to the Applicable Time, and if such Preliminary Prospectus or Free Writing Prospectus would have cured
the defect giving rise to such loss, claim, damage, liability or expense; and provided , further, that with respect to each Selling Stockholder, the
indemnification provision of this Section 8(a) shall be only with respect to information furnished in writing by or on behalf of such Selling
Stockholder for use in the Registration Statement, any Issuer Free Writing Prospectus, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) and no Selling Stockholder shall be liable for any misstatements of any other Selling Stockholder; and
provided, further , that the liability under this subsection of each Selling Stockholder shall be limited to an amount equal to the aggregate gross
proceeds after underwriting commissions and discounts, but before expenses, to such Selling Stockholder from the sale of Shares sold by such
Selling Stockholder hereunder. The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company
and the Selling Stockholders may otherwise have.

          (b) Indemnification of the Company, its Directors and Officers and the Selling Stockholders . Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement, the
Selling Stockholders and each person, if any, who controls the Company or any Selling Stockholders within the meaning of the Securities Act
or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company, or any such director, officer or
controlling person may become subject, insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any
Issuer Free Writing Prospectus, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or arises out of or is
based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, and only to the extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Issuer Free Writing Prospectus, any preliminary prospectus or the

                                                                        27
Prospectus (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Company
and the Selling Stockholders by the Representatives expressly for use therein; and to reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the Company, or any such director, officer or controlling person in
connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The
Company hereby acknowledges that the only information that the Underwriters have furnished to the Company expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) are the names set forth in the
table in the first paragraph and the statements set forth in the eighth through fifteenth paragraphs concerning stabilization and other market
transactions, the third, fourth and fifth sentences in the paragraph concerning online offering and the last paragraph concerning the appointment
of a qualified independent underwriter not being necessary under the caption “Underwriting” in the Prospectus. The indemnity agreement set
forth in this Section 8(b) shall be in addition to any liabilities that each Underwriter may otherwise have.

          (c) Notifications and Other Indemnification Procedures . Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any liability which it may have for contribution or any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and,
to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided , however , if the defendants in any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any reasonable legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the
preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate
counsel (other than local counsel), reasonably approved by the indemnifying party (or by the Representatives in the case of Section

                                                                          28
9), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party.

          (d) Settlements . The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement,
compromise or consent (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf
of any indemnified party.

          SECTION 9. Contribution . If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses,
claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, from the offering of the Shares pursuant to
this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Stockholders, on
the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Shares pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Shares pursuant to this Agreement (before deducting expenses) received by the Company and the Selling
Stockholders, and the total underwriting discount received by the Underwriters, in each case as set forth on the front cover page of the
Prospectus bear to the aggregate initial public offering price of the Shares as set forth on such cover. The relative fault of the Company and the
Selling

                                                                         29
Stockholders, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or
alleged inaccurate representation or warranty relates to information supplied by the Company and the Selling Stockholders, on the one hand, or
the Underwriters, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

         The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions set forth in Section 8(c) with respect to notice of
commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided , however , that no additional
notice shall be required with respect to any action for which notice has been given under Section 8(c) for purposes of indemnification.

          The Company and the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contribution pursuant
to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in this Section 9.

          Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such Underwriter in connection with the Shares underwritten by it and distributed to the public. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 9 are
several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their names in Schedule A. For purposes
of this Section 9, each director, officer, employee and agent of an Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement and each person, if any, who controls the Company within the
meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.

         SECTION 10. Default of One or More of the Several Underwriters . If, on the Closing Date or a Subsequent Closing Date, as the case
may be, any one or more of the several Underwriters shall fail or refuse to purchase Shares that it or they have agreed to purchase hereunder on
such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Shares to be purchased on such date, the other Underwriters shall be obligated, severally, in the
proportions that the number of Firm Shares set forth opposite their respective names on Schedule A bears to the aggregate number of Firm
Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the

                                                                        30
Representatives with the consent of the non-defaulting Underwriters, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the Closing Date or a Subsequent Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares and the aggregate number of Shares with respect to which such
default occurs exceeds 10% of the aggregate number of Shares to be purchased on such date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Shares are not made within 48 hours after such default, this Agreement shall
terminate without liability of the Company and any non-defaulting Underwriter to any other party except that the provisions of Section 4,
Section 8 and Section 9 shall at all times be effective and shall survive such termination. In any such case either the Representatives or the
Company shall have the right to postpone the Closing Date or a Subsequent Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements
may be effected.

         As used in this Agreement, the term “Underwriter” shall be deemed to include any person substituted for a defaulting Underwriter
under this Section 10. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.

         SECTION 11. Termination of this Agreement . Prior to the Closing Date this Agreement may be terminated by the Representatives by
notice given to the Company and the Selling Stockholders if at any time (i) trading or quotation in any of the Company’s securities shall have
been suspended or limited by the Commission or by the Nasdaq Stock Market, Inc., or trading in securities generally on the New York Stock
Exchange or the Nasdaq Stock Market, Inc. shall have been suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall have been declared by
federal or New York authorities or a material disruption in commercial banking or securities settlement or clearance services in the United
States has occurred; or (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any substantial change or development involving a prospective
substantial change in United States’ or international political, financial or economic conditions, as in the sole judgment of the Representatives
is material and adverse and makes it impracticable or inadvisable to market the Shares in the manner and on the terms described in the
Prospectus or to enforce contracts for the sale of securities. Any termination pursuant to this Section 11 shall be without liability on the part of
(a) the Company or the Selling Stockholders to any Underwriter, except that the Company and the Selling Stockholders shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to Sections 4 and 6 hereof or (b) any Underwriter to the Company
and the Selling Stockholders.

          SECTION 12. No Advisory or Fiduciary Responsibility . Each of the Company and the Selling Stockholders acknowledges and agrees
that: (i) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the public offering price of the
Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company and the Selling
Stockholders, on the one hand, and the several Underwriters, on the other hand, and the Company and the Selling Stockholders are capable of

                                                                         31
evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement;
(ii) in connection with each transaction contemplated hereby and the process leading to such transaction each Underwriter is and has been
acting solely as a principal and is not the financial advisor, agent or fiduciary of the Company, the Selling Stockholders or their respective
affiliates, stockholders, creditors or employees or any other party; (iii) no Underwriter has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Company or the Selling Stockholders with respect to any of the transactions contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or the Selling Stockholders
on other matters) and no Underwriter has any obligation to the Company or the Selling Stockholders with respect to the offering contemplated
hereby except the obligations expressly set forth in this Agreement; (iv) the several Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those of the Company and the Selling Stockholders and that the several
Underwriters have no obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the
Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company and the Selling Stockholders have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed
appropriate.

        This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company, the Selling
Stockholders and the several Underwriters, or any of them, with respect to the subject matter hereof. The Company and the Selling
Stockholders hereby waive and release, to the fullest extent permitted by law, any claims that the Company and the Selling Stockholders may
have against the several Underwriters with respect to any breach or alleged breach of agency or fiduciary duty.

          SECTION 13. Representations and Indemnities to Survive Delivery . The respective indemnities, agreements, representations,
warranties and other statements of the Company, of its officers, of the Selling Stockholders and of the several Underwriters set forth in or made
pursuant to this Agreement (i) will remain operative and in full force and effect, regardless of any (A) investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the officers or employees of any Underwriter, or any person controlling the
Underwriter, or the Company, the officers or employees of the Company, or any person controlling the Company, any Selling Stockholder or
any person controlling such Selling Stockholder, as the case may be, or (B) acceptance of the Shares and payment for them hereunder and (ii)
will survive delivery of and payment for the Shares sold hereunder or any termination of this Agreement.

        SECTION 14. Notices . All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and
confirmed to the parties hereto as follows:

                                                                       32
If to the Representatives:

        Piper Jaffray & Co.
        800 Nicollet Mall
        Minneapolis, Minnesota 55402

        Facsimile: (xxx) xxx-xxxx
        Attention:

        Banc of America Securities LLC
        9 West 57 th Street
        New York, New York 10019

        Facsimile: (212) 583-8567
        Attention: Legal Department

        William Blair & Company
        222 West Adams Street
        Chicago, Illinois 60606

        Facsimile: (xxx) xxx-xxxx
        Attention:

        and

        Shearman & Sterling LLP
        599 Lexington Avenue
        New York, NY 10022
        Facsimile: (212) 848-7179
        Attention: Robert Evans III

    If to the Company:

        MWI Veterinary Supply, Inc.
        651 S. Stratford Drive, Suite 100
        Meridian, ID 83642
        Facsimile: (208) 955-8904
        Attention: James F. Cleary, Jr., President and Chief Executive Officer

with a copy to:

        Dechert LLP
        Cira Centre
        2929 Arch Street
        Philadelphia, PA 19104
        Facsimile: (215) 994-2222
        Attention: James A. Lebovitz

                                                            33
         Any party hereto may change the address for receipt of communications by giving written notice to the others.

         SECTION 15. Successors . This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute
Underwriters pursuant to Section 10 hereof, and to the benefit of (i) the Company, its directors, any person who controls the Company within
the meaning of the Securities Act and the Exchange Act and any officer of the Company who signs the Registration Statement, (ii) the Selling
Stockholders, (iii) the Underwriters, the officers, directors, employees and agents of the Underwriters, and each person, if any, who controls
any Underwriter within the meaning of the Securities Act and the Exchange Act, and (iv) the respective successors and assigns of any of the
above, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this
Agreement. The term “successors and assigns” shall not include a purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.

          SECTION 16. Partial Unenforceability . The invalidity or unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such
minor changes) as are necessary to make it valid and enforceable.

         SECTION 17. Governing Law Provisions

      (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.

          (b) Consent to Jurisdiction . Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and
County of New York, Borough of Manhattan, or the courts of the State of New York in each case located in the City and County of New York,
Borough of Manhattan (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other
proceeding brought in any such court has been brought in an inconvenient forum.

                                                                         34
           SECTION 18 . Failure of Selling Stockholders to Sell and Deliver Shares . If (i) Bruckman, Rosser, Sherrill & Co. II, L.P. (“BRS”)
shall fail to sell and deliver to the Underwriters the Shares to be sold and delivered by BRS at the Closing Date pursuant to this Agreement, or
(ii) one of the Selling Stockholders, other than BRS, shall fail to sell and deliver to the Underwriters the Shares to be sold and delivered by such
Selling Stockholder at the Closing Date pursuant to this Agreement, and the remaining Selling Stockholders do not exercise the right hereby
granted to increase, prorate or otherwise, the Shares to be sold by them hereunder to the total number of Shares to be sold by all Selling
Stockholders as set forth in Schedule A, then the Underwriters may at their option, by written notice from the Representatives to the Company
and the Selling Stockholders, either (a) terminate this Agreement without any liability on the part of any Underwriter or, except as provided in
Sections 4, 6, 8 and 9 hereof, the Company or the Selling Stockholders, or (b) purchase the shares which the Company and other Selling
Stockholders have agreed to sell and deliver in accordance with the terms hereof. If one or more of the Selling Stockholders shall fail to sell
and deliver to the Underwriters the Shares to be sold and delivered by such Selling Stockholders pursuant to this Agreement at the Closing
Date or any Subsequent Closing Date, then either the Representative or the Company or, by joint action only, the non-defaulting Selling
Stockholders, shall have the right, by written notice from the Representatives to the Company and the Selling Stockholders, to postpone the
Closing Date or such Subsequent Closing Date, as the case may be, but in no event for longer than seven days in order that the required
changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements may be effected.

          SECTION 19. General Provisions . This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes
all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.
This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. The Company acknowledges and agrees that in connection with all aspects of each
transaction contemplated by this Agreement, the Company and each of the Underwriters have an arms length business relationship that creates
no fiduciary duty on the part of each of the Underwriters and each expressly disclaims any fiduciary relationship. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.

         Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 8 and the contribution
provisions of Section 9, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of
Sections 8 and 9 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in
order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the Prospectus (and any
amendments and supplements thereto), as required by the Securities Act and the Exchange Act.

                                                                         35
         If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

                                                                                    Very truly yours,

                                                                                    MWI VETERINARY SUPPLY, INC.


                                                                                    By:
                                                                                          Name: James F. Cleary, Jr.
                                                                                          Title: President and Chief Executive Officer

        The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives as of the date first above written.

PIPER JAFFRAY & CO.
BANC OF AMERICA SECURITIES LLC
WILLIAM BLAIR & COMPANY, L.L.C.
    Acting as Representatives of the
    several Underwriters named in
    the attached Schedule A.

By: Piper Jaffray & Co.

By:
      Managing Director

                                                                      36
                                   SCHEDULE A

                                 Number of Firm
                                  Shares to be
Underwriters                       Purchased
Piper Jaffray & Co.
Banc of America Securities LLC
William Blair & Company, LLC

         Total                       [   ]
                                                                    SCHEDULE B

                      Maximum Number of Firm   Maximum Number of Optional
Selling Stockholder       Shares to be Sold         Shares to be Sold


Total                      [         ]                [         ]
                                                                           SCHEDULE C

Schedule of Free Writing Prospectuses Included in the Disclosure Package
                    SCHEDULE D

Price to Public:

Number of Shares:

Closing Date:
                                                                                                                                        EXHIBIT A

                                                    [Form of Accountants’ Comfort Letter]

         (i)        in our opinion the audited financial statements and financial statement schedules included in the Registration Statement and
the Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Securities
Act and the related rules and regulations adopted by the Commission;

          (ii)      on the basis of a reading of the latest unaudited financial statements made available by the Company and its subsidiaries;
their limited review, in accordance with standards established under Statement on Auditing Standards No. 100, of the unaudited interim
financial information for [            ]; carrying out certain specified procedures (but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and audit, compensation and corporate governance and nominating committees of the
Company and the Subsidiaries; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters
of the Company and its subsidiaries as to transactions and events subsequent to [              ], nothing came to our attention which caused us to
believe that:

                  (A)        any unaudited financial statements included in the Registration Statement and the Prospectus do not comply as to
         form in all material respects with applicable accounting requirements of the Act and with the related rules and regulations adopted by
         the Commission with respect to registration statements on Form S-1; and said unaudited financial statements are not in conformity
         with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements
         included in the Registration Statement and the Prospectus;

                   (B)       with respect to the period subsequent to [              ], there were any changes, at a specified date not more than five
         days prior to the date of the letter, in the long-term debt of the Company and its subsidiaries or capital stock of the Company or
         decreases in the stockholders’ equity of the Company as compared with the amounts shown on the [                  ] consolidated balance
         sheet included in the Registration Statement and the Prospectus, or for the period from [              ] to such specified date there were
         any decreases, as compared with [               ] in total revenues or income before income taxes or in total or per share amounts of net
         income of the Company and its subsidiaries, except in all instances for changes or decreases set forth in such letter, in which case the
         letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation is not deemed
         necessary by the Representatives;

                  (C)        the information included in the Registration Statement and Prospectus in response to Regulation S-K, Item 301
         (Selected Financial Data), Item 302 (Supplementary Financial Information) and Item 402 (Executive Compensation) is not in
         conformity with the applicable disclosure requirements of Regulation S-K;

                                                                        A-1
         (iii)     we have performed certain other specified procedures as a result of which we determined that certain information of an
accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the Registration Statement and the Prospectus, agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of legal interpretation.

          (iv)     The Company shall have received from Deloitte & Touche LLP (and furnished to the Representatives) a report with respect
to a review of unaudited interim financial information of the Company for the eight quarters ending [    ], in accordance with Statement
on Auditing Standards No. 100.

                                                                     A-2
                                                                                                                                     EXHIBIT B

                                               [Form of Opinion of Counsel for the Company]

         Opinion of counsel for the Company to be delivered pursuant to Section 5(d) of the Underwriting Agreement.

         References to the Prospectus in this Exhibit B include any supplements thereto at the Closing Date.

         (i)       The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the
State of Delaware.

         (ii)       The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations under the Underwriting Agreement.

         (iii)       Each significant subsidiary of the Company (as defined in Rule 405 under the Securities Act) has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, or lease, as the case may be, and to operate its properties and to conduct its business as described in the Disclosure Package
and the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each of the jurisdictions in
which its principal facilities are located, as discussed in the Prospectus.

         (iv)        All of the issued and outstanding capital stock of each such significant subsidiary of the Company has been duly authorized
and validly issued, is fully paid and non-assessable and except as disclosed in the Prospectus is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or, to the knowledge of such counsel, any pending or
threatened claim.

         (v)       The Company’s authorized equity capitalization is as set forth in the Disclosure Package and the Prospectus. The
authorized, issued and outstanding capital stock of the Company (including the Common Stock) conform in all material respects to the
descriptions thereof set forth in the Disclosure Package and the Prospectus. All of the outstanding shares of Common Stock, including the
shares of Common Stock owned by the Selling Stockholders, have been duly authorized and validly issued and are fully paid and
nonassessable.

         (vi)       No stockholder of the Company or any other person has any preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (i) by operation of the charter or by-laws of the Company or the General
Corporation Law of the State of Delaware or (ii) pursuant to any agreement filed as an exhibit to the Registration Statement.

         (vii)     The Underwriting Agreement has been duly authorized, executed and delivered by the Company.

                                                                       B-1
         (viii)    The Shares to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale
pursuant to the Underwriting Agreement and, when issued and delivered by the Company pursuant to the Underwriting Agreement against
payment of the consideration set forth therein, will be validly issued, fully paid and nonassessable.

        (ix)        The Registration Statement has been declared effective by the Commission under the Securities Act. To the knowledge of
such counsel, no stop order suspending the effectiveness the Registration Statement, if any, has been issued under the Securities Act and no
proceedings for such purpose have been instituted or are pending or are contemplated or threatened by the Commission.

         (x)        The Registration Statement, the Prospectus and each amendment or supplement to the Registration Statement and the
Prospectus filed on or before the date hereof, as of their respective effective or issue dates (other than the financial statements and supporting
footnotes and schedules and other financial information derived from such financial statements included therein or in exhibits to or excluded
from the Registration Statement, as to which we express no opinion) comply as to form in all material respects with the applicable requirements
of the Securities Act.

         (xi)       The Shares have been listed for quotation on the Nasdaq Stock Market, Inc.

        (xii)       To the knowledge of such counsel, there are no legal or governmental actions, suits or proceedings pending or threatened
which are required to be disclosed in the Registration Statement, other than those disclosed therein or in the Disclosure Package.

         (xiii)     No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental
authority or agency, is required for the Company’s execution, delivery and performance of the Underwriting Agreement and consummation of
the transactions contemplated thereby and by the Prospectus and the Disclosure Package, except as required under applicable state securities or
blue sky laws and from the NASD (as to which we express no opinion) and the Securities Act.

          (xiv)      The execution and delivery of the Underwriting Agreement by the Company and the performance by the Company of its
obligations thereunder (other than performance by the Company of its obligations under the indemnification section of the Underwriting
Agreement, as to which we express no opinion) (i) have been duly authorized by all necessary corporate action on the part of the Company; (ii)
will not result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary; (iii) will not constitute a breach of,
or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, (A) the Company’s Credit Agreement, dated as of June 18, 2002, by and among the Financial Institutions named
therein as the Lenders, Bank of America, N.A. as the Agent and MWI Veterinary Supply Co., as amended, or (B) any other agreement filed as
an exhibit to the Registration Statement; or (iv) will not result in any violation of any statute, law, rule, judgment, regulation, order or decree
known to us applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties.

                                                                        B-2
         (xv)    The Company is not, and after receipt of payment for the Shares will not be, an “investment company” within the meaning
of Investment Company Act.

          (xvi)    Except as disclosed in the Prospectus under the caption “Shares Eligible for Future Sale”, to the knowledge of such counsel,
there are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by the Underwriting Agreement, other than the Selling Stockholders, except for such rights
as have been duly waived.

          In addition, such counsel shall state in a separate letter that they have participated in conferences with officers and other
representatives of the Company, the Selling Stockholders, representatives of the independent public or certified public accountants for the
Company and representatives of the Underwriters at which the contents of the Registration Statement, the Disclosure Package and the
Prospectus, and any supplements or amendments thereto, and related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the
Disclosure Package or the Prospectus (other than as specified in paragraphs 3 and 14 of our opinion delivered to you today), and any
supplements or amendments thereto, on the basis of the foregoing, nothing has come to their attention which would lead them to believe that (i)
either the Registration Statement or any amendments thereto, at the time the Registration Statement or such amendments became effective,
contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) the Prospectus, as of its date or at the Closing Date or any Subsequent Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; or (iii) the Disclosure Package, as of the Applicable Time, contained any
untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in light of
circumstances under which they were made, not misleading (it being understood that such counsel need express no belief as to the financial
statements or footnotes or schedules or other financial data derived therefrom, included in the Registration Statement, the Prospectus, the
Disclosure Package or any amendments or supplements thereto).

          In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the
General Corporation Law of the State of Delaware, the New York Corporation Law or the federal law of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion (which shall be dated the Closing Date or any Subsequent Closing Date, as the
case may be, shall be satisfactory in form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the Representatives) of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters; provided , however , that such counsel shall further state that they believe
that they and the Underwriters are justified in relying upon such opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public officials.

                                                                        B-3
                                                                                                                                     EXHIBIT C

                                         [Form of Opinion of Counsel for the Selling Stockholders]

         The opinion of such counsel pursuant to Section 5(h) of the Underwriting Agreement shall be rendered on the Representatives at the
request of the Company and shall so state therein. References to the Prospectus in this Exhibit C include any supplements thereto at the Closing
Date.

          (i)                 The Underwriting Agreement has been duly authorized, executed and delivered by or on behalf of each of
Bruckmann, Rosser, Sherrill & Co. II, L.P., (“ BRS ”) and Agri Beef Co. (“ Agri Beef ”) (BRS and Agri Beef collectively, the “ Entity Selling
Stockholders ”). The Underwriting Agreement has been duly executed and delivered by or on behalf of each of Keith E. Alessi, Mary Patricia
B. Thompson, James M. Ross, James W. Culpepper, Jeffrey J. Danielson, John R. Ryan and James S. Hay (such persons, collectively, the “
Individual Selling Stockholders ”). The Individual Selling Stockholders and the Entity Selling Stockholders are collectively referred to herein
as the “ Selling Stockholders ”.

          (ii)                  The execution and delivery by each Entity Selling Stockholder of, and the performance by such Entity Selling
Stockholder of its obligations under, the Underwriting Agreement and its Custody Agreement and its Power of Attorney will not contravene or
conflict with, result in a breach of, or constitute a default under, the charter or by-laws, partnership agreement or other organizational
documents, as the case may be, of such Entity Selling Stockholder, or, to our knowledge, violate or contravene any provision of applicable law
or regulation, or violate, result in a breach of or constitute a default under the terms of any other agreement or instrument to which such Entity
Selling Stockholder is a party or by which it is bound, or any judgment, order or decree applicable to such Entity Selling Stockholder of any
court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over such Entity Selling Stockholder. To our
knowledge, the execution and delivery of each Individual Selling Stockholder of, and the performance by such Individual Selling Stockholder
of his or her obligations under, the Underwriting Agreement and his or her Custody Agreement and his or her Power of Attorney will not
violate or contravene any provision of applicable law or regulation, or violate, result in a breach of or constitute a default under the terms of
any other agreement or instrument to which such Individual Selling Stockholder is a party or by which he is bound, or any judgment, order or
decree applicable to such Individual Selling Stockholder of any court, regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Individual Selling Stockholder.

         (iii)                Such Selling Stockholder is, on the Closing Date and on any Subsequent Closing Date, the record and beneficial
owner of the Shares to be sold by the Selling Stockholder hereunder free and clear of all liens, encumbrances, equities and claims and has duly
indorsed such Shares in blank. Each Entity Selling Stockholder has the legal right and power, and all

                                                                       C-1
authorizations and approvals required by law and under its charter or by-laws, partnership agreement or other organizational documents to enter
into the Underwriting Agreement and its Custody Agreement and Power of Attorney, to sell, transfer and deliver all of the Shares which may
be sold by such Entity Selling Stockholder pursuant to the Underwriting Agreement and to comply with its other obligations thereunder. Each
Individual Selling Stockholder has the legal right and power to enter into the Underwriting Agreement and his or her Custody Agreement and
Power of Attorney to sell, transfer and deliver all of the Shares which may be sold by such Individual Selling Stockholder pursuant to the
Underwriting Agreement and to comply with his or her other obligations thereunder.

         (iv)                Each of the Custody Agreement and Power of Attorney of each Entity Selling Stockholder has been duly
authorized, executed and delivered by such Entity Selling Stockholder. Each of the Custody Agreement and the Power of Attorney of each
Individual Selling Stockholder has been duly executed and delivered by such Individual Selling Shareholder.

          (v)                  Upon payment for the Shares to be sold by each Selling Shareholder and pursuant to the Underwriting
Agreement, delivery of such Shares, as directed by the Underwriters, to DTC or to such other nominee as may be designated by the DTC,
registration of such Shares in the name of the DTC or such other nominee and the crediting of such Shares on the books of DTC to securities
accounts of the Underwriters (assuming that neither DTC nor any such Underwriter has notice of any adverse claim within the meaning of
Section 8-105 of the New York Uniform Commercial Code (the “ UCC ”) to such Shares), (A) DTC shall be a “protected purchaser” of such
Shares within the meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the Underwriters will acquire a security
entitlement in respect of such Shares and (C) no action based on any “adverse claim” (within the meaning of Section 8-102 of the UCC) to such
Shares may be asserted against the Underwriters with respect to such security entitlement.

       (vi)                  To our knowledge, no consent, approval, authorization or other order of, or registration or filing with, any court or
governmental authority or agency is required for the consummation by such Selling Stockholder of the transactions contemplated in the
Underwriting Agreement, except as required under the Securities Act, applicable state securities or blue sky laws, and from the NASD.

          We have assumed, for purposes of our opinion set forth in paragraph (v) above, that when payment, delivery and crediting of the
Shares occurs (A) the Shares will have been registered in the name of the DTC or another nominee designated by DTC, in each case on the
Company’s share registry in accordance with its certificate of incorporation, bylaws and applicable law, (B) DTC will be registered as a
“clearing corporation” within the meaning of Section 8-102 of the UCC and (C) appropriate entries to the Underwriters’ accounts on the
records of DTC will have been made pursuant to the UCC. In addition, with respect to the opinion set forth in paragraph (v), we have assumed
(Y) that the security certificates (as defined in Section 8-102 of the UCC) representing the Shares are physically located in the State of New
York and (Z) that the principal place of business of the securities intermediary (as defined in Section 8-102 of the UCC) is within the State of
New York. The opinion set forth in paragraph (v) above is limited to Articles 8 and 9 of the UCC.

                                                                       C-2
          In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the
General Corporation Law of the State of Delaware, the federal law of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion (which shall be dated the Closing Date or any Subsequent Closing Date, as the case may be, shall be satisfactory in
form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such opinion as if it were addressed to them and
shall be furnished to the Representatives) of other counsel of good standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters; provided , however , that such counsel shall further state that they believe that they and the Underwriters are
justified in relying upon such opinion of other counsel, and (B) as to matters of fact, to the extent they deem proper, on certificates of the
Selling Stockholders and public officials.

                                                                      C-3
                                                                                                                                           EXHIBIT D

[ • ], 2006

Piper Jaffray & Co.
         As Representatives of the Several Underwriters
c/o Piper Jaffray & Co.
[                               ]
[          ], [     ]

Re:       MWI Veterinary Supply, Inc. (the “Company”)

Ladies and Gentlemen:

          The undersigned is an owner of record or beneficially of certain shares of Common Stock of the Company (“Common Stock”) or
securities convertible into or exchangeable or exercisable for Common Stock. The Company proposes to carry out a public offering of
Common Stock (the “Offering”) for which you will act as the representatives of the underwriters. The undersigned recognizes that the Offering
will be of benefit to the undersigned and will benefit the Company. The undersigned acknowledges that you and the other underwriters are
relying on the representations and agreements of the undersigned contained in this letter in carrying out the Offering and in entering into
underwriting arrangements with the Company with respect to the Offering.

          In consideration of the foregoing, other than shares sold by the undersigned in the Offering, the undersigned hereby agrees that the
undersigned will not (and will cause any spouse or immediate family member of the spouse or the undersigned living in the undersigned’s
household not to), without the prior written consent of the Representatives (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, transfer, establish an open “put
equivalent position” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange
Act of 1934, as amended, or otherwise dispose of or transfer (or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition of) including the filing (or participation in the filing of) of a registration statement with the Securities and
Exchange Commission in respect of, any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock currently or hereafter owned either of record or beneficially (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the undersigned (or such spouse or family member), or
publicly announce an intention to do any of the foregoing, for a period commencing on the date hereof and continuing through the close of
trading on the date 90 days after the date of the Prospectus (the “Lock-Up Period”). If (i) the Company issues an earnings release or material
news, or a material event relating to the Company occurs, during the last 17 days of the Lock-Up

                                                                          D-1
Period, or (ii) prior to the expiration of the lock-up period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the lock-up period, the restrictions imposed by this agreement shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless the
Representatives waive, in writing, such extension. The undersigned hereby acknowledges that the Company has agreed in the Underwriting
Agreement to provide written notice of any event that would result in an extension of the Lock-Up Period pursuant to the previous paragraph to
the undersigned (in accordance with Section 14 of the Underwriting Agreement) and agrees that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned hereby further agrees that, prior to engaging in any
transaction or taking any other action that is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up
Agreement to and including the 34th day following the expiration of the initial Lock-Up Period, it will give notice thereof to the Company and
will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up
Period (as such may have been extended pursuant to the previous paragraph) has expired. The undersigned also agrees and consents to the entry
of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.

          Notwithstanding the foregoing, the undersigned may without the prior written consent of Piper Jaffray & Co. transfer shares of
Common Stock (i) as a bona fide gift or gifts, provided that prior to such transfer the donee or donees agree in writing to be bound by the
restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or immediate family of the undersigned,
provided that prior to such transfer the trustee of the trust agrees in writing to be bound by the restrictions set forth herein, (iii) if such transfer
occurs by operation of law, such as rules of descent and distribution, statutes governing the effects of a merger or a qualified domestic order,
provided that prior to such transfer the transferee agrees in writing to be bound by the restrictions set forth herein, (iv) as a distribution to
limited partners or stockholders of the undersigned, provided that prior to such transfer the distributees agree in writing to be bound by the
restrictions set forth herein, (v) that have been registered under the Securities Act of 1933, as amended (other than on a Form S-8) that are
purchased by the undersigned either directly from the underwriters or in the open market after the Offering and the undersigned, at the time of
transfer, is not an affiliate of the Company. For purposes of this agreement, “immediate family” shall mean any relationship by blood, marriage
or adoption, not more remote than first cousin.

       With respect to the Offering only, the undersigned waives any registration rights relating to registration under the Securities Act of
any Common Stock owned either of record or beneficially by the undersigned, including any rights to receive notice of the Offering.

         It is understood that if the Company and the Representatives notify you that they do not intend to proceed with the Offering, if the
Underwriting Agreement is not executed and delivered by the parties thereto or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to delivery of the Common Stock, or

                                                                          D-2
if the Offering shall not have occurred by September 30, 2006, the undersigned will be released from its obligations under this agreement.

         This agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives,
and assigns of the undersigned.


                        Printed Name of Holder
                                                                   By:
                                                                            Signature


         Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf of an
entity)

                                                                      D-3
                                                                                  EXHIBIT E

                                               List of Entities and Individuals
                                             Entering into a Lock-Up Agreement

Bruckmann, Rosser, Sherrill & Co. II, L.P.
Agri Beef Co.
James F. Cleary, Jr.
Keith E. Alessi
Bruce C. Bruckmann
John F. McNamara
Robert N. Rebholtz, Jr.
Stephen C. Sherrill
Mary Patricia B. Thompson
James S. Hay
Jeffrey J. Danielson
James M. Ross



                                                            E-1
                                                                                                                                     Exhibit 5.1

July      , 2006


MWI Veterinary Supply, Inc.
6515 S. Stratford Drive
Suite 100
Meridian, ID 83642

                   Re:          Form S-1 Registration Statement
                           Registration No. 333-134039

Gentlemen and Ladies:

We have acted as your counsel in connection with the preparation and filing of the Registration Statement on Form S-1 (Registration No.
333-134039), as subsequently amended (the “Registration Statement”), originally filed with the Securities Exchange Commission on May 12,
2006 relating to the proposed registration and sale of: (i) 869,565 shares (the “Shares”) of your Common Stock, par value $0.01 per share
(“Common Stock”) to be issued by you and (ii) 2,117,814 shares (the “Selling Stockholder Shares”) of your Common Stock held by the selling
stockholders (the “Selling Stockholders”) listed in the Registration Statement under the caption “Principal and Selling Stockholders”
(collectively, the “Registered Shares”). The Registered Shares will be sold to the Underwriters named in the Registration Statement pursuant
to the Underwriting Agreement substantially in the form as filed as Exhibit 1.1 to the Registration Statement (the “Underwriting Agreement”).

We have participated in the preparation of the Registration Statement and we have reviewed originals or copies, certified or otherwise
identified to our satisfaction of such records, documents, agreements and certificates and examined such questions of law, as we have deemed
necessary or appropriate for the purpose of this opinion. In making our examination of the records, documents, agreements and certificates, we
have assumed the authenticity of the same, the correctness of all information contained therein, the genuineness of all signatures, the authority
of all persons entering and maintaining records or executing documents, agreements and certificates (other than persons executing documents,
agreements and certificates on behalf of the Company), and the conformity to authentic originals of all items submitted to us as copies (whether
certified, conformed, photostatic or by other electronic means) of records, documents, agreements or certificates. In rendering our opinions,
we have relied as to factual matters upon certificates of public officials and certificates and representations and warranties of the Company.

Based upon and subject to the foregoing, we are of the opinion that (a)(i) when the Underwriting Agreement has been duly authorized,
executed and delivered, and (ii)
when the Shares have been delivered to and paid for by the Underwriters at a price per share not less than the per share par value of the
Common Stock as contemplated by the Underwriting Agreement, the issuance and sale of the Shares will be validly issued, fully paid and
nonassessable, and (b) the Selling Stockholder Shares are validly issued, fully paid and nonassessable.

The opinions expressed herein are limited to the General Corporation Law of the State of Delaware, as amended, and we express no opinion
herein concerning the laws of any other jurisdiction.

The opinions expressed herein are rendered for your benefit in connection with the transactions contemplated herein. The opinion expressed
herein may not be used or relied on by any other person, nor may this letter or any copies thereof be furnished to a third party, filed with a
government agency, quoted, cited or otherwise referred to without our prior written consent, except as noted below.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the prospectuses
contained therein under the caption “Legal Matters.” In giving such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission
thereunder.

Very truly yours,

Dechert LLP
                                                                                                                                    Exhi b it 15

July 18, 2006

MWI Veterinary Supply, Inc.
Meridian, Idaho

We have made a review, in accordance with the standards of the Public Company Accounting Oversight Board (United States), of the
unaudited interim financial information of MWI Veterinary Supply, Inc. and subsidiaries for the periods ended March 31, 2006 and 2005, as
indicated in our report dated May 1, 2006; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, is included in this Amendment No. 2 to Registration Statement No. 333-134039.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the
Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections
7 and 11 of that Act.

DELOITTE & TOUCHE LLP
 Boise, Idaho
                                                                                                                              Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Amendment No. 2 to Registration Statement No. 333-134039 of our report dated November 22, 2005 relating to
the consolidated financial statements and consolidated financial statement schedule of MWI Veterinary Supply, Inc. and subsidiaries as of
September 30, 2005 and 2004 and for each of the three years in the period ended September 30, 2005 (which report expresses an unqualified
opinion and includes an explanatory paragraph regarding the adoption of Statement of Financial Accounting Standards No. 150, Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and Equity ), appearing in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the heading “Experts” in such Prospectus.

 DELOITTE & TOUCHE LLP
 Boise, Idaho
July 18, 2006