Why Private Equity is Drawn to Pet Health’s Investment Pedigree

Pet care is a sure growth prospect for funds

Recent investment activity speaks volumes about this trend. For example, EQT’s high-profile investment into Dechra Pharmaceuticals, valuing the company at an impressive £4.5bn, truly underscores the burgeoning interest from investors. Other noteworthy investments have included Inflexion’s funding of Village Vets, Eurazeo’s input into French veterinary group Sevetys, and CVC’s acquisition of Medivet, among others.

This pattern illustrates a clear trend: the rise in pet ownership and consequent spending is creating an attractive long-term prospect for private equity firms, according to industry insiders like Tom Gladstone from OC&C Strategy Consultants. His belief is that this sector, including areas such as pet-tech and vet chains, holds great consolidation potential within European countries such as Germany, France, Spain, and Italy. Furthermore, these markets also present opportunities to expand into related fields, offering varied pricing and enticing potential yield.

Meanwhile, Exponent partner James Gunton highlights the overall benefits of the animal health market. These stem from both stable and growing end-market demand. The sector, he notes, benefits from a long-standing trend of big pharmaceutical companies outsourcing certain aspects of their work, allowing them to concentrate on core competencies. He also points to strong barriers to entry, such as heavy regulation, that help ensure healthy margins.

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