In a recent Mergermarket article, author Jeff Sheban outlined the significance of Mars’ $8.8 billion acquisition of the veterinary and dog day-care company VCA Inc. (NASDAQ:WOOF). Sheban cited information from SDR Ventures’ VP Jodi Burrows, including the fact that Mars’ pet care lines are growing faster than its gum and candy business. Prior to this transaction, Brussels-based Mars Global Petcare already owned food brands Iams, Pedigree and Whiskas, and veterinary services Banfield Pet Hospital, BluePearl and Pet Partners. According to the article, VCA has nearly 800 animal hospitals in North America and 137 Camp Bow Wow day care locations in the U.S.
SDR’s Burrows expects VCA to remain acquisitive; she notes in the article that the company grew through numerous roll-ups from a single location in Los Angeles in 1986 to its current stronghold. Nevertheless, Mars and VCA face competition in the luxury daycare services segment, namely from Phoenix-based Dogtopia. In 2017, Dogtopia plans to add 40 franchised locations to its current set of 44 locations. Florida-based Pet Paradise and Day Spa received a recent investment and also may pose a competitive threat.
At the end of the day, the pet space is experiencing plenty of activity and investment, which Burrows attributes to the “humanization of pets” trend. As she states in the article, “People are treating their pets like children, spending money on them, and making sure their pets are happy.” Mars’ recent acquisition may have brought some high-profile exposure to the pet industry, but this space has been active for some time now, and should remain that way going forward.
Mergermarket is a subscription-based media company specializing in corporate financial news and analysis. Users with access can read Sheban’s full article, “Dealspeak: Mars’ dogged pursuit of VCA,” by clicking here.
To read SDR’s latest pet industry quarterly report, please click here.