Illustration: Brendan Lynch/Axios
VetCor's just-announced acquisition of People, Pets, & Vets values the general practice vet care chain just north of $1.1 billion, sources tell Axios.
Why it matters: Despite some slow-moving processes (see below), the market's labor crisis, and rocky financing markets, PP&V's healthy trade demonstrates we're not quite in the dog days of vet care dealmaking.
Driving the news: VetCor, the veterinary services giant backed by Harvest Partners and Cressey & Co, announced its acquisition of PP&V on Tuesday.
- Interestingly, Cressey was also the majority owner of PP&V — and will remain invested in the combination.
- The deal concludes a Harris Williams-run auction that also included pure play sponsors, per Axios' April report. Jefferies worked with VetCor.
By the numbers: The deal translates to approximately 19.5x PP&V's real EBITDA of about $55 million, sources say.
- Fully adjusted EBITDA was marketed at about $80 million, sources said previously.
- PP&V encompasses 150-plus animal hospitals throughout the western and southern U.S.
Yes, and: PP&V's sale multiple is consistent with relevant sector trades.
- Deal multiples for general practice vet groups — ticking higher through the pandemic-fueled pet boon — have recently commanded upper teens to 20x multiples of EBITDA in some cases.
- Specialty vet groups have fetched as much as 25x EBITDA.
Of note: Merrick Axel, a lead partner on both Cressey's VetCor and PP&V deals, joined Varsity Healthcare Partners as partner and head of a new Chicago office, after 16 years at his prior firm, per a Thursday news release.
What we're watching: Whether PP&V's trade gives other buyers and sellers more confidence to pursue a transaction amid today's turbulent financing market.
- Namely, Partners Group this summer mandated William Blair for a potential sale of Blue River Petcare, the Chicago-based network of veterinary hospitals, Axios wrote in August.
- Timing was not clear, but one source speculated then that a post-Labor Day launch at the earliest was likely.
Yes, and: what happened to Encore Vet Group, CareVet and Southern Veterinary Partners?
- North Castle Partners kicked off a sale process for Encore earlier this year via Harris Williams, Axios wrote.
- Compass Group Equity Partners engaged Lincoln International to advise on a sale of CareVet early this year, but it's unclear if the business ever formally went to market.
- Shore Capital Partners hired Goldman Sachs and Jefferies to explore a sale of SVP, Mergermarket reported earlier this summer.
Meanwhile, VCs are increasingly looking to take a slice of the large and growing market, which private equity has historically dominated. In the last two weeks alone:
- PillPack alum Gavin Cotter raised $20 million in Series A funding for his latest venture, an online pet pharmacy called Koala Health, the CEO told Axios yesterday.
- Petfolk, a vet startup boasting simplified access to health records and care teams, in August clinched $40 million in Series A funding.
The parties declined to comment.