L Catterton invests in Alliance Animal Health pet hospital chain

Veterinary hospital operator Alliance Animal Health has secured an investment from private equity firm L Catterton for a valuation of between $ 750 million and $ 800 million, Axios has learned from four sources.

Why is this important: Private equity in 2021 has shown an insatiable appetite for veterinary care.

Details: Existing shareholder LightBay Capital will remain an investor in Alliance.

  • The Stamford, Connecticut-based company marketed $ 39 million in pro forma adjusted EBITDA as part of its sale process, sources said. This implies that Alliance has increased its EBITDA five-fold since LightBay backed the company in June 2019, one person added.
  • Alliance owns and partners veterinarians in veterinary hospitals in 15 and growing states, emphasizing medical independence and the benefit of shared resources (e.g. purchasing power).
  • L Catterton has a long history of investing in pet and consumer health companies.

The big picture: Own a pet increases, and investors view the veterinary care industry as recession-resistant.

  • The U.S. government backed up this notion when it said veterinary practices were essential businesses during the pandemic, and the industry has proven adept at converting to a drop-and-pickup model.
  • EBITDA multiples in the upper range to mid-20x are the new normal, although this is a bit complicated by a series of targeted acquisitions.

What we are looking at: The possibility of industry giants’ IPOs in 2022.

  • National Veterinary Associates, supported by JAB Investors, was said to be thinking about a public offer earlier this year. More recently, he delved deeper into specialty veterinary care with two deals over $ 1 billion, purchasing Ethos Veterinary Health and SAGE Veterinary Centers.
  • European IVC Evidencia was due to apply for a public listing before Silver Lake invests earlier this year, valuing it at around € 12.3 billion (over $ 13.8 billion).
  • Pathway Vet Alliance, owned by TSG Consumer Partners, is also on the IPO waiting list.

About Patrick K. Moon

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