Canada’s pet industry has grown steadily for years, and industry experts say growth in pet ownership accelerated during the pandemic.Christopher Katsarov/The Globe and Mail
European veterinary care provider IVC Evidensia is merging with Canadian pet care company VetStrategy for an undisclosed price, in a deal that will create one of the largest animal hospital networks in the world.
Founded in 2006, VetStrategy operates 270 animal hospitals across nine provinces. The company is majority-owned by Boston-based Berkshire Partners, which acquired a 70-per-cent stake from Toronto-based Imperial Capital Group Ltd. in August, 2020. That transaction valued the business at $1.4-billion. VetStrategy reported pro forma revenue of $770-million in 2020.
“Under the broader IVC Evidensia umbrella, we will be able to further invest in our network of clinics across Canada while enhancing the range of services we provide to our customers and our veterinarian partners,” VetStrategy CEO Orin Litman said in a press release. “I am particularly excited about our shared vision for the benefits that digitalization can bring to the pet care ecosystem, and the expertise in that area that joining with IVC Evidensia can bring.”
Berkshire’s investment will be rolled into an ownership stake in IVC, which operates 2,000 clinics across Europe. It will also get a seat on IVC’s board of directors. In February, IVC raised US$4.2-billion in an equity round led by U.S. private equity firm Silver Lake and multinational food producer Nestlé that valued the company at US$14.5-billion. According to media reports, the financing resulted in IVC’s parent company, EQT, a Swedish private equity firm, abandoning plans to list the company’s shares on the London Stock Exchange.
“Our businesses are a great fit, not just in terms of expanding our geographic footprint, but also in terms of our shared vision and values,” IVC CEO Stephen Clarke said in a press release.
Both IVC and VetStrategy have both been active acquirers of small veterinary businesses. VetStrategy has 110 more locations than it did in August, 2020, when Berkshire bought its majority stake.
Canada’s pet industry has grown steadily for years, and industry experts say growth in pet ownership accelerated during the pandemic. Pet owners are also spending more on holistic food, pet insurance, accessories and grooming.
Investors indicated optimism in the pet industry when Canadian pet-store chain Pet Valu Holdings Ltd. did a $316-million initial public offering in June, where an overallotment option was exercised in full. Pet Valu shares are up 28 per cent since they began trading.
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