Navigating the Companion Animal Sector: Pet & Animal Health Investment

Pet ownership has been steadily rising in recent years as people around the world brought companion animals into their homes. Against the backdrop of the COVID-19 pandemic, even more consumers became pet parents. According to Shelter Animals Count, rescue organizations in the U.S. recorded a 15% rise in animal adoptions in 2020.

These trends and more have captured investor attention in a sector long proven to be recession resilient.

The Humanization of Pets

Pets are increasingly viewed as members of the family. In turn, owners are pursuing higher quality, specialty goods and veterinary care to ensure the best for their animals.

Health & Wellness Focus

Owners have developed a keen interest in their pets’ wellbeing, from the ingredients in their food to the specialist animal health providers they visit. With more time at home with pets during the pandemic, this trend accelerated.

Pet Parents

More than 95% of owners consider their pets to be part of the family—and treat them as such. When purchasing products for their pets, consumers require goods that meet the standard for a beloved member of the family.

Longer Pet Lifespans

With a focus on animal health and wellness, dogs are living twice as long as they did 30 years ago, largely due to the high-quality foods and veterinary care they are receiving. As pet lifespans extend, the need for quality vet care has only grown more critical.

The Growing Middle Class

The growing middle class globally has brought more pet owners and higher pet spending to new markets, notably China and Brazil. This opens the door for global investors to explore cross-border deals.

Tech-Enabled Tools

Digital tools are empowering pet owners to gather data on their pet’s activities and closely monitor their wellbeing.

 

These systemic trends have heightened private equity and strategic buyer interest in pet and vet businesses. The sector tailwinds have driven valuations up, and increased competition for pet assets among investors as they look to diversify their portfolios and enter new markets. For many, a buy-and-build strategy brings advantages of geographical diversification, an ideal channel mix or economies of scale within specific subsectors.

  • Companion Animals by the Numbers

    Deal Volume and Valuations for Pet Businesses

    M&A activity in the pet space has steadily grown over the last decade, with deal volume reaching a peak in 2020. Valuations for pet businesses were higher in 2020 than any of the previous five years.
    [Source: Pitchbook Data]

Pet

Perspectives

Differentiated Pet Food Brands Fetch High Multiples: Guidance for Sector Entrepreneurs

For investors, the recession resilient nature of the pet sector and its strong performance through multiple economic cycles has long been notable. Most recently, the pandemic solidified the sector’s resilience…Read More

Resilient Pet Sector Attracts Increasing Investor Interest Underpinned by Changing Consumer Habits

Members of Lincoln’s Consumer Group share thoughts on the resilient pet sector; identifying the latest trends in investor appetite and key strategies for growth for pet businesses in 2021…Watch Now

Pet Sector M&A Insights and the Implications of COVID-19

In times of market volatility and economic downturns, investors gravitate to certain recession-resistant sectors.  Generally, the pet care category grew through the Great Recession when compared to the broader economy,… Read More

The Evolving U.S. Pet Retail Landscape & Broader Impact on Pet Sector

The pet retail sector continues to generate strong momentum against a backdrop of numerous favorable industry trends: The “pets as family” trend is as strong as ever, with 95% of… Read More

Recent Transactions

Lincoln applied its deep pet sector expertise and knowledge to successfully secure a majority investment for its client, PetHonesty…Read More

Lincoln acted as the buy-side advisor to Apax, working with the team to provide industry insight and guidance throughout the transaction within a highly accelerated time frame…Read More

VMG-Partners_Solid-Gold_HH-Group

Lincoln acted as the exclusive financial advisor to Solid Gold, working closely with the management team and shareholders to identify the right partner and navigate the cross-border nature of the deal…Read More

After introducing the opportunity, Lincoln advised Spectrum Brands, successfully completing bilateral negotiations with Armitage within a highly accelerated time frame…Read More

Following the sale of Hero Pet Brands to Manna Pro in 2019, Lincoln served as the trusted advisor to Morgan Stanley Capital Partners and Manna Pro throughout the entire process…Read More

Capvest IPN Inspired Pet Nutrition LCatterton 2020

Lincoln acted as buy-side advisor to CapVest, a leading European private equity firm, working across borders to secure a highly competitive auction…Read More

Global Pet Sector Advisors

Alex Masters
Managing Director
London

Charles Walder
Managing Director
Los Angeles

Christopher Petrossian
Managing Director
Los Angeles

David Houser
Managing Director
Chicago

Ludovic Rodié
Managing Director
Paris

Perreira Kyle 616x616

Kyle Perreira
Vice President
Los Angeles

Cunningham Tom

Tom Cunningham
Vice President
London

Meet our Senior Team in Consumer