The Ontario Teachers’ Pension Plan has bought PetVet, a chain of veterinary practices, from private equity firm Catterton.
The deal was worth $440 million, according to the Wall Street Journal.
More details from the WSJ:
The sale is the latest in a string of transactions in the pet-care and pet-products market, where increased consumer spending has paved the way for premium deal prices.
Betting that there is still growth ahead for PetVet, a Westport, Conn., business first backed by Catterton in 2012, the firm is rolling $40 million of the proceeds from the sale into the transaction alongside OTPP, according to the memorandum.
Similar to a physician or dental network, PetVet’s business model focuses on buying veterinary practices and then providing back-office services such as payroll, marketing, accounting and human resources.
The $440 million price tag translates into roughly 11 times PetVet’s earnings before interest, taxes, depreciation and amortization, a hefty multiple even by 2014’s standards and an indication of the value investors see in the pet market.
PetSmart, PetVet and National Veterinary Associates have been the beneficiaries of a sharp increase in the amount of money spent on pets in the U.S., a figure which has tripled in the past two decades, increasing annually even through the global economic downturn.
In 2014, Americans spent an estimated $58.51 billion on their pets, with more than a quarter of that cost going toward veterinary services, according to the American Pet Products Association, a trade group.
Spending on vet care increased roughly 6% to $15.25 billion in 2014 from $14.37 billion a year earlier, according to the association’s estimates.
The Ontario Teachers’ Pension Plan manages $140 billion in assets.
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