When it comes to the health and wellbeing of their pets, most owners are willing to spare no expense.
Last year, the pet care industry saw over $150B in sales of supplies, vet visits, treats, and more in the US alone. And it shows no signs of heeling. The global pet care market is projected to reach over $500B in the next five years.
For dealmakers looking to fetch high returns, the pet care industry holds a wealth of opportunities across the veterinary care, pet insurance, daycare & boarding, food & supplies, grooming, and training segments.
In this PE Playbook, the Grata team has put together the latest need-to-know trends for investors considering making moves in the pet care market, including:
- How the industry is fragmented
- Which market segments are seeing the most growth
- Roll-up activity in the space
The market map above is not intended to be an exhaustive representation of companies in the space.Companies that provide services that fall into multiple segments are categorized in this report by their primary offering.
Industry Overview
Market Distribution
Geography
Source: Grata
Dealmakers looking to make moves in the US pet care industry should prioritize areas with high costs of living and higher average income levels. People who live in these locations tend to have more disposable income to dedicate to their furry friends.
Unsurprisingly, California, the richest and most populous state in the country, is home to the most pet care companies in the US. Californians spend the most money on their pets by far, hitting an aggregate of $26.9B in 2023. Top spending categories include high-end pet food, luxury pet products, and veterinary care.
Florida, Texas, and New York — also among the wealthiest and most populous states — are the second, third, and fourth largest pet care markets in the US, respectively. Outdoor pet products comprise one of the main spending areas for pet owners in Florida and Texas, whereas New Yorkers typically spend more on premium pet food and pet insurance.
Pet care investors should also consider the South as a whole. The region has one of the highest rates of pet ownership in the country, and it has among the top shares of the grooming and boarding markets. Additionally, disposable incomes are on the rise as the region experiences population surges and business expansions. Combined, these factors are driving significant growth in the region’s pet care industry.
Ownership
Source: Grata
The vast majority of companies operating in the pet care industry are independently owned, offering a wealth of opportunities for investors.
Currently, there are over 18,000 private companies that are ripe for acquisition. Middle-market companies account for 15% of industry share.
Segment Distribution
Source: Grata
This report focuses on the following segments of the pet care industry. Grata users can see curated lists of some of the companies used to create each segment by clicking the links below.
Public Comparables
Source: Grata
The pet insurance segment leads the industry average revenue, growth, EV/EBITDA, and EBITDA margin. Pet owners are increasingly purchasing insurance for their cats and dogs, particularly in the North American market. Over 6.2M pets in the region were insured in 2023. That year in the US, total premium insurance policy volume reached $4B — up 150% from 2018, according to the North American Pet Health Insurance Association (NAPHIA).
Veterinary care also continues to be a solid bet for investors. Public companies in the space see $9.9B in average revenue and mean growth rates of 3.5%. Veterinary care is also the largest segment of those analyzed in this report, meaning that there are plenty of opportunities for investors looking to snap up multiple companies in the industry.
Companies in the food & supplies market tend to see healthy profits. Pet supplies stores tend to be relatively low-cost operations. Meanwhile, with pet ownership and pet spending on the rise, pet stores can charge premium prices for high-quality foods and products.
Daycare & boarding is the clear outlier here, with comparatively minimal revenue and negative growth. However, investors shouldn’t be quick to dismiss this sector. It's important to note that public comp data is limited here as 86% of companies in the market are privately owned.
Private Comparables
Source: Grata
In the private sector, food & supplies companies see the most average revenue by far. As mentioned above, the relatively low operational costs combined with pet owners being increasingly willing to pay top prices for pet care products tend to yield significant profits.
Pet insurance and veterinary care also perform well above the industry average across the board. As the two largest segments in the pet care industry, there are certainly plenty of opportunities for dealmakers to pursue. However, deals in these high-profile segments will likely attract more competition, which could drive prices higher for investors.
Dealmakers looking to establish themselves as leaders in the pet care industry should consider the grooming and training sectors, both of which are growing well above the average rate for the industry and have received minimal funding so far.
Acquisitions
Top Roll-Ups
Source: Grata
The pet care space has seen a significant amount of roll-up activity over the last several years. VetCor is far and away the leader, with 714 acquisitions in the space. Nearly all of those acquisitions are veterinary practices or animal hospitals.
The other top strategic buyers shown here are also primarily focused on snapping up vet care facilities and animal hospitals.
Recent Acquisitions
Source: Grata
Bansk Group Acquires PetIQ
In October, Bansk Group completed its $1.5B acquisition of PetIQ, a pet medication and wellness company based in Idaho.
Cord Christensen, PetIQ’s founder, chairman, and CEO, said the deal would “accelerate [the company’s] mission of providing pet parents convenient access to affordable healthcare while accelerating many longer-term growth initiatives for PetIQ’s continued success.”
If you’re an investor interested in companies similar to PetIQ, try these:
Learn more about this acquisition — or any of the others listed below — anytime, anywhere using the latest version of the Grata Go mobile app. Get all of the ownership and investment data you need right in the palm of your hand.
Rover Group Acquires Cat in a Flat
Leading online pet care marketplace Rover purchased Cat in a Flat, a UK-based cat-sitting platform, in October. The financial terms of the deal were not disclosed.
Cat in a Flat launched in 2014 and has since grown its userbase to over 50,000 cat-sitters across nine countries. The deal bolsters Rover’s efforts to continue expanding into new international markets.
If you’re an investor interested in companies similar to Cat in a Flat, try these:
PetLove&Co Acquires Provet
In November, Brazil-based pet supplies company PetLove&Co purchased Provet, an educational platform for veterinarians and pet owners. Provet is based in the UK.
If you’re an investor interested in companies similar to Provet, try these:
Grey Wolf Animal Health Acquires the Compounding Pharmacy of Manitoba
Grey Wolf Animal Health announced its $22.5M acquisition of the Compounding Pharmacy of Manitoba in December. The move expands Grey Wolf’s product mix and will boost the growth of its pharmacy business unit.
If you’re an investor interested in companies similar to the Compounding Pharmacy of Manitoba, try these:
Altano Group Acquires Baker McVeigh
Altano Group, an international group of equine clinics, acquired Baker McVeigh, a full-service equine veterinary practice, in January. Baker McVeigh has three locations in the UK, all of which are now part of the Altano Group.
If you’re an investor interested in companies similar to Baker McVeigh, try these:
Mixlab Acquires the Pet Apothecary
Veterinary pharmacy Mixlab purchased Wisconsin-based pet pharmacy The Pet Apothecary in January. The move is part of Mixlab’s expansion into the Midwestern US. Mixlab aims to use its tech platform to create a more streamlined pharmacy experience for pet owners.
If you’re an investor interested in companies similar to the Pet Apothecary, try these:
Live Deals
Hundreds of live deals and active mandates are being showcased on the Grata Deal Network. Here are some examples of mandates related to the pet care industry:
- A pet and pet supplies store with $10.6M in revenue and a $2.4M EBITDA
- A livestock and pet supply business with $8.2M in revenue
- A Florida-based pet supplies retailer earning $5.6M in revenue
- A Texas-based pet business with $5.5M in revenue
- A pet retail and services company based in South Dakota with $3M in revenue
If you’re interested in these deals and you want to see more, register to learn more here.
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Get the Most Out of the Playbook
If you’re an investor interested in making moves in the pet care space, Grata can help you put the insights in this article into action.
From in-depth market research to sourcing to pipeline management and relationship nurturing, Grata’s end-to-end dealmaking platform streamlines your workflows so that you can close more deals.
Schedule a demo today to get started.
