Q4–2022 Veterinary Services Update
Despite a slowdown in consolidation activity across the veterinary services sector in the latter half of 2022, primarily driven by macroeconomic headwinds and uncertain market conditions, the sector continues to exhibit strong valuation multiples relative to other healthcare services sub-verticals. Service providers continually benefit from a large and growing population of pets, aided by continued employee preference for COVID-aided work from home arrangements, providing ample headwinds to support continued growth in this market. An estimated 70%+ of US households own a pet, with growing “humanization” contributing to increased spend on veterinary services. As the US faces an uncertain economic outlook in 2023, the veterinary services sector could see an uptick in investor interest due to its status as more recession proof than other sectors.
Despite the fury of M&A activity over the last 3-5 years, there remains 20k+ independent veterinary practices nationwide, exhibiting the fragmentation in this market and persistent opportunity for private equity backed platforms to consolidate veterinary care to benefit from a broader market footprint and increased economies of scale.
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