9 deals in the pet care sector: Opportunity in a fragmented market

It’s been a busy year for the pet care sector, with plenty of private equity investments announced in the second half of 2024 alone, including in veterinary services.

“Investors continue to see an opportunity to drive professionalization in a sector that remains fragmented and unorganized,” Gilles Vanhouwe, director at Verlinvest, told PE Hub. “The move towards professionalization allows vets and nurses to benefit from the attractive work environment they deserve and for pet parents to receive the quality of care they require.”

The factors driving deals in the sector are present across the world, he added.

“We expect demand for vet services to grow consistently in the near term, driven by a new generation of pet parents investing substantially more in pet health and wellbeing through preventative care and higher-quality food products. Activity is typically skewed toward countries with lower levels of professionalization and consolidation, including Italy, Spain and Germany, but we anticipate an uptick in other markets in the coming years.”

Verlinvest is an international, family-backed evergreen investment firm. It has offices in Brussels, London, Mumbai, New York and Singapore. Last year it invested in Nesto, a chain of veterinary practices.

Since July, there have been plenty of deals announced in the pet care sector. Here is a breakdown of those investments in reverse chronological order:

1. Polaris takes majority stake in Denmark’s animal pharma biz Salfarm

Polaris Private Equity in November agreed to acquire a majority stake in Salfarm, an animal pharma company, to establish a leading player in the Nordic animal health market.

Kolding-based Salfarm was founded in 1979 and has had an over 10 percent annual growth rate over a 10-year period.

2. MSCP bets nutritional supplements are the next big thing in pet care

Also in November, Morgan Stanley Capital Partners acquired FoodScience, a producer of nutritional supplements for people and their pets. The seller was Wind Point Partners, which bought FoodScience in 2021.

Headquartered in Williston, Vermont, FoodScience was founded in 1973 by the Orlandi family, who “had a passion for developing animal and human health solutions,” according to the company’s website. For people, FoodScience has brands, such as DaVinci, which markets supplements aimed at improving general health, including heart, hormone, digestive and immune system.

3. L Catterton invests in Brazilian veterinary hospital group WeVets

L Catterton invested in WeVets, a Brazil-based veterinary hospital group, in November.

Founded in 2020, WeVets has quickly expanded to 15 hospitals and two labs in São Paulo and Rio Grande do Sul.

“This partnership with WeVets is an attractive opportunity to continue building the one-stop destination for high-quality pet care in the third-largest pet market globally,” said Ramiro Lauzan, a partner at L Catterton Latin America, in a statement.

4. RF Investment Partners invests in Altro and Amici Pharmaceuticals

In September, RF Investment Partners invested in Altro and Amici Pharmaceuticals, two Long Island, New York-based pharmaceutical and veterinary care companies.

Altro is a service provider to veterinary distributors and human generic pharmaceutical manufacturers, while Amici is a virtual pharmaceutical manufacturer with products that have uses in veterinary and human applications.

5. Inflexion makes fourth deal in animal health sector with TPP

Inflexion in July said it will invest in Tierarzt Plus Partner (TPP), a German group of veterinary practices, to help grow and expand the company.

Berlin-based TPP has close to 100 vet practices across Germany and around 1,700 employees. It partners with local veterinarians to provide animal healthcare services, mainly for small animals, and supports them with training, best industry practices and technology investments.

6. Carmelina Capital backs veterinary supplies provider KVP International

Also in July, Carmelina Capital Partners made an investment in KVP International, a McKinney, Texas-based provider of veterinary supplies and small animal wellness products to the veterinary industry.

KVP CEO Ken Bowman will continue to lead the company.

7. LLCP pumps capital into Improve International

Levine Leichtman Capital Partners agreed to invest in Improve International Group in partnership with its management team in July. RJD Partners was the seller.

Improve International is a veterinary postgraduate training and education provider. It uses training facilities with digital content to deliver courses in 20 countries and in nine different languages. Based in Swindon, UK, it has over 170 employees, with offices in Germany, Spain, Portugal, the US and France.

8. Cinven to exit pet care business Arcaplanet

Still in July, Cinven agreed to sell Italian pet care retailer Arcaplanet to Fressnapf, while in a separate deal the private equity firm made a minority investment in Fressnapf.

Cinven took a majority stake in Arcaplanet in 2022 and combined it with MaxiZoo Italia, the former Italian subsidiary of German-headquartered pet care retailer Fressnapf.

Since Cinven invested, Arcaplanet has grown its physical store count to more than 560 locations in Italy, boosted its digital presence and expanded its service offering.

9. Charme Capital Partners snaps up Animalia

Charme Capital Partners, via its Charme IV fund, agreed to take a 56 percent stake in Animalia, a veterinary care services provider in Italy. The deal was announced in July.

Animalia has more than 75 clinics spread across 13 Italian regions. The company covers all areas of veterinary services, with a specific focus on veterinary clinics with advanced medical services and second-opinion services. These include advanced surgery, hospitalization, 24/7 emergency care and advanced diagnostic imaging such as CT and MRI scans. The company is based in Milan.

PE Hub expects to see more pet care investment deals in the coming months, as the market drivers that led to these deals are still present.