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IVC Evidensia HQ
IVC Evidensia photo
IVC Evidensia is headquartered in a building called The Chocolate Factory, which was once inhabited by Cadbury’s confectionery company (now owned by Mondelēz). Presumably coincidentally, Nestlé, the food and confectionery company, is a minority owner of IVC Evidensia.
Britain’s IVC Evidensia, the world’s second largest veterinary clinic owner, is set to get bigger soon, with a big step into North America bringing the number of clinics worldwide to around 2,000 in 17 countries.
The agreement to acquire the Canadian VetStrategy chain for an undisclosed amount brings IVC Evidensia closer to Mars Inc. as the world’s largest owner of veterinary practices.
The private equity-backed IVC Evidensia, based in Bristol, England, counts the Swiss conglomerate Nestlé (famous for cocoa) as a minority shareholder. Privately owned Mars, headquartered in Virginia, United States, is best known for selling candy, but is a giant in the veterinary industry, owning more than 2,500 clinics in 20 countries, according to its website.
VetStrategy owns the Groupe Vétérinaire Daubigny and operates more than 270 hospitals in nine Canadian provinces. Boston-based private equity firm Berkshire Partners acquired a majority stake in VetStrategy in July 2020; it will invest its investment in the expanded IVC Evidensia.
The combination, subject to customary regulatory approvals, will allow VetStrategy to “further invest in our network of veterinary clinics” and improve customer service, CEO Orin Litman said in a press release late last week.
“Having co-founded the company in 2006, I am very proud of the growth and dedication our organization has shown to our key stakeholders, and I am very excited to be working with one of the leading veterinary groups in the world …” said Litman.
The deal comes at a time when the booming demand for pet care services is attracting a surge of investment in veterinary clinics, even as assets in the industry reach dizzying heights.
Companies like IVC Evidensia are growing aggressively because their strategy is in part based on cost savings through scaling. Much of the veterinary deal activity is driven by private equity firms, who typically use high debt to buy businesses, then run them leaner before selling them for a profit.
The plans for IVC Evidensia have been in flux lately. Its largest investor, the Swedish private equity group EQT, had planned to list the company on the London Stock Exchange. In a change of heart, however, EQT said in February, Nestlé and a technology-driven group called Silver Lake agreed to invest an additional € 3.5 billion ($ 4.1 billion) in private capital, bringing the entire company to € 12.3 billion rate ($ 14.6 billion) – a number referred to as “stratospheric” by a financial data company, 9fin.
The share prices of two of the world’s largest publicly traded veterinary hospital companies – CVS Group and Pets at Home, both UK – have soared to record highs in the past few months, further evidence of how much investors value the sector for their expected earnings, at least partly due to a pandemic pet boom.
As a sign that rapid growth is risky, CVS found that the annual number of veterinary vacancies (the number of vacancies in the veterinary field compared to the total number of positions) had increased to 8.3% compared to 6.9% in the previous year. The widening deficit, which is putting pressure on CVS to raise salaries to attract talent, is “given the expansion of the number of new jobs created to meet growing demand,” it said.
As a private company, Mars does not have to disclose its financial performance. However, last month the company announced it would invest $ 500 million in its North American veterinary business through 2025. The move includes introducing a $ 15 an hour floor wage, which is expected to be in full effect by the end of 2022, to improve educational and career pathways for veterinarians and provide debt relief for college students, Mars said.
In Canada, IVC Evidensia’s move at VetStrategy is shaking a market that has already attracted the attention of large US companies. Mars has “over 100” practices in Canada through its VCA Animal Hospitals group, according to its website. National Veterinary Associates, a US company acquired by the German private equity company JAB Investors in 2019, is also strongly represented there with 61 practices listed on its website. The total number of practices in Canada in 2020 was around 3,300, according to the Canadian Veterinary Medical Association.
IVC Evidensia already has a presence in Canada and in May acquired a “significant stake” in a French pet funeral company, Veternity, which has expanded into a number of countries including Canada and the United States
VIN News Service comments are opinion pieces that present insights, personal experiences and / or perspectives on current issues from members of the veterinary community. To submit a review for review, email news@vin.com.
