2024年H2宠物行业报告：并购活动、资本市场现状及当前趋势分析

THE DEAL HOUND CONTENTS ❑The money is out there,both in bulging private equitycoffersandconsumerpockets.Petownerswantcareandproducts,andthefragmentedcaresector,operatinglargely Transaction ActivityActive BuyersPublic BasketM&A Market Activity ABOUT SDR ❑However,PE rollups in veterinary care are catching theattentionof consumer advocates who worry the tightsupplyof caregivers is hurting consumers.Too muchscrutinycoulddampenactivity–oritmayjustprovideabit Establishedin2002,SDRVentureshasdevelopeddeep M&A and capitaltransactionknowledge and expertise.SDRofferstransactionadvisory,privatecapitalformationandbusiness ❑Innovation continues to attract younger consumers whoseemtobeleaningawayfromtraditional(human)familiesinfavor of pets and are willing to spend on luxuries consultingservicesacrossawiderangeofindustries.Weservebusinessownersandoperatorsofprivatelyheldcompaniesand provide them with a DEAL HOUND CONTACTS Let’sMakeaDeal,BuyNoworBuyNever? Scott MitchellManaging DirectorPet Team720.221.9220 years,we’rewatchingtwoseeminglyopposingforcesthatmaycombinetoboostactivityinthesector.Ononeside,there’samountainofcashsittinginprivateequitycoffersreferredtoinonereportasan“unprecedentedwarchest”estimatedatabout$2trillion.Andthatcashhasanexpirationdateasantsyinvestorsareeagertoseetheirmoneyputtowork.Addingtothestockpileofavailablecapital,Fedinterestratesappeartobepoisedformoredeclinesinthecomingyear,althoughit’sunclearhowmany.So,there’sthecapacity,the“carrot,”encouragingdealmaking.Theflipside, Logan BohlenderDirectorPet Team Ben PaddorAssociatePet Team ConsumerhawkSen.ElizabethWarrenandSen.RichardBlumenthaltook noticeofPEfirmJABHoldinginvestmentsinpetcareandsentashotoverthebowinalettertothecompanythathasalreadyspentbillionsbuyingupveterinarypractices,accusingthecompanyof“lootingtheprofitswhilereducingquality of care,increasing prices for pet owners,and makingworkingconditions even harder for veterinarians.”Not the kind ofattentionJAB–aftertwicetanglingwiththeFederalTradeCommission–likelywants.If PE wants in on veterinary care for its cash-paying,pet- THE DEAL HOUND Weseenoendnotonlytotheneedforpetcare,butalsoforpremiumpetproductsandfood.Youngerpeople,GenerationZ–bornfromthelate1990stotheearly2010s–arewaitinglongertohavechildren,orevennothavingachildatall.Formany,petsarethenewkids.Andforagenerationstrugglingwithstudentloans,highrent,impossiblehomeprices,retirementsavingsneeds,andinflation,it’scheapertospoilabelovedpetthantoprovideforeventhemostbasicneedsofachild.EvenifyoutreatFidotodoggydaycaresohe’snotlonelywhenyou’reatwork,theaveragecostisabout$9,000ayear(andnopublicservantisgoingtoshowupwithacourtorderifyousimplyleavethemat DemandforPetCareIsScratchingattheDoor Morethan45%ofAmericanhouseholdsincludedogs,andaboutathirdowncats.That’salotoffurryfriends,about163million,notincludingbirds,gerbils,andothercritters,accordingtotheAmericanVeterinaryMedicalAssociation.Andtheyallneedshotsandpillsandexams.Allthatcarein2024addedupto$150billion,up300%inthepastdecade.9,10 Allthosepetsstandtocreatedemands.Demandforpetcareproviders,demandforpetinsurance,demandfornewerandbettersolutionsandproducts,anddemandfromprivateequityinvestorsseekingreturns.There’sashortageofveterinarians,thecostofcareisontherise,andsomepartsofthecountryarebeingcalled“veterinarydeserts”whereconvenientcareisunavailable.Privateequityhastakennoticeoftheindustry’sdependablecashrevenue,thepotentialformodernizationandefficiencies,andthefracturednatureofthebusiness.Formanyinvestors,allofthismakesforasectorripeforrollupsandconsolidation.Meanwhile,overworkedvetsareincreasinglyseekingthework-lifebalanceof Asdemandandcostsrise,newoptionsareevolving.Pethealthinsurancetocovertherisingcostsisexpectedtoshowacompoundannualgrowthrate(CAGR)of17.5%through2030,risingtoa$10billionmarket.AndwhilesomepoliticiansarelookingtolimitPEinvestment,othersarelookingforinnovationinthefield,abetterwaytodothings.InColorado,votersin 2024 approved Proposition 129 which creates an entirely new profession,the“veterinary professionalassociate,”sort likea physician’s assistant for humansthat willbeableto perform muchof thetasks handled byveterinarians(minusthe abilitytowrite prescriptions)withfar fewerhoursof training.Thisinterestingdevelopment FromKibbletoCarriages,YoungerOwnersAreReadytoSpend We’recarefullywatchingtrendsimpactingtheemergingbuyingpowerofyoungerpeople,GenZandtosomedegreemillennials.Asthemountingburdenofhighereducation,healthcare,rentorhomeownership,daycare,andretirementsavingsweighthemdown,birthratesintheU.S.havehitahistoriclow.Globallyit’sestimatedby2050nearlythreequartersoftheworld’scountrieswon’tbeabletosustaina“replacementrate”ofbirths.Whilesomewarnthismay WithoutthecostofreplacingJunior’sKedsandToughskinseveryschoolyear,youngerpetowners,alreadyincreasinglyhealthconscious,areexercisingawillingnesstopayforpremiumpetfoods.We’reseeingaslewofnewfoodoptions,including“yeast derived”foods and probiotics,prebiotics,synbiotics,and postbiotics.Purina PetCare supports