STOCKHOLM/FRANKFURT (Reuters) - Buyout group EQT is set to sell a 20 percent to 25 percent stake in Independent Vetcare Group (IVC) to institutional investors in deal that will value one of Europe’s biggest veterinary services providers at over 1.5 billion euros ($1.7 billion), two sources told Reuters.
Swedish private equity firm EQT Partners, IVC’s controlling investor, is bringing in co-investors and will refinance the company, the sources familiar with the deal said, declining to be named as the process is private.
The deal is expected to be announced this week, the sources said, and follows media reports last year that EQT was hoping to sell IVC, which owns about 540 clinics and hospitals across Europe and also operates a successful online pet pharmacy.
Demand for high-margin pet services such as vets and grooming is rising in Europe, and significant opportunity for consolidation in the industry has prompted both large consumer companies and private equity firms to enter the sector.
Nestle has exposure through its Purina PetCare division and consumer giant Mars, whose pet-care division is now larger than its traditional confectionary business after a string of purchases, entered the European pets market last year.
BC Partners also spent 700 million British pounds ($899 million) last year to buy veterinary practice operator VetPartners, gaining exposure to the area where CVS Group and Pets at Home also compete.
Jefferies is running the capital injection for IVC, which EQT acquired from Summit Partners and consequently merged with a peer business called Evidensia in 2017.
IVC is also the largest operator in Britain, having been formed in 2011 from the consolidation of several large independent veterinary practices across the UK. The company secured about 150 million pounds add-on financing last year to continue expanding.
Reporting by Esha Vaish in Stockholm and Arno Schuetze in Frankfurt; Editing by Susan Fenton