Buyout group TSG Consumer Partners has agreed to acquire veterinary clinic chain Pathway Vet Alliance from the North American private equity arm of Morgan Stanley Investment Management, according to the Wall Street Journal (WSJ).
People familiar with the matter told the newspaper that a sale could be worth around USD 2.00 billion, including debt.
However, further details of the transaction have not been disclosed at this time.
Morgan Stanley acquired a minority interest in Pathway Vet in 2016 when the company had 30 pet hospitals.
Since coming under the private equity firm’s ownership the business has been on an acquisition spree and has expanded to a network of over 240 vet hospitals across 35 US states.
Last year, the group picked up 79 new vet practices alone.
Pet care is usually a safe investment for private equity firms based on downturn, with the sector having received billions of dollars in recent years due to an increase in consumer spending, the WSJ reported.
Citing the American Pet Products Association, the newspaper said pet owners in the US are expected to spend nearly USD 100.00 billion on their animals this year on food and toys and everything in between, which is up USD 5.00 billion from last year.
This is one of a few transactions to be signed off amid the fears of the economic effects of the novel coronavirus pandemic, which has already led to dip in the stock market and other uncertainties relating to the value of companies.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 27 deals targeting veterinary, pet care and animal food manufacturers announced worldwide in 2020 to date.
In the largest of these, Chinese pig feed manufacturer Shenzhen Kingsino Technology agreed to issue new shares to Wanqu Chanrong Huinong Investment Guangzhou and others worth CNY 859.56 million (USD 122.63 million).
Empresas Iansa and Iansagro to sell agreed to sell Chilean pet food maker LDA to Empresas Tucapel for CLP 37.00 billion (USD 44.05 million) in the second biggest deal.
Beijing Dabeinong Technology Group, Australia’s National Veterinary Care and Malaysia-based Rhone Ma Holdings, among others, have also been targeted in the year so far.
© Zephus Ltd