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.
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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] - Sign up to receive Lincoln's perspectives
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Perspectives |
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Pet Trends Impacting M&A in 2022The pet industry has evolved significantly over the past few years with several trends impacting the way pet product brands, manufacturers, retailers, customers and investors view the…Read More |
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Five Macro Trends Driving Growth in U.S. Branded Pet FoodPet ownership in the U.S. surged in recent years as pets have become valued members of household families, yielding benefits such as companionship, improved mental health and others…Read More |
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Differentiated Pet Food Brands Fetch High Multiples: Guidance for Sector EntrepreneursFor 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 |
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Resilient Pet Sector Attracts Increasing Investor Interest Underpinned by Changing Consumer HabitsMembers 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… |
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The Evolving U.S. Pet Retail Landscape & Broader Impact on Pet SectorThe 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 |
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Global Pet Sector Advisors |
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Alex Masters |
Charles Walder |
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Christopher Petrossian |
David Houser |
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Ludovic Rodié |
Kyle Perreira |
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Tom Cunningham |
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Animal Health |
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Perspectives |
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Animal Health Players Pursue Vertical Integration as a Path to GrowthAnimal health businesses that have established a strong presence within their area of expertise, may be considering where the next best path to growth lies. While cross-border expansion and consolidation…Read More |
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Cross-Border Deals: The Right Prescription for Animal HealthAs the humanization of pets continues and pet lifespans grow longer, investment opportunities in animal health abound. While most animal health companies will first look for growth within their own…Read More |
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Animal Health in the UK: Insights from the LaingBuisson Investing in Healthcare ConferencePet ownership in the UK increased during the pandemic as animals provided comfort and companionship that individuals lacked during lockdown. Matthew Lee, Managing Director at Lincoln International, joined other industry… Read More |
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Global Veterinary Services Market: On Cloud CaninePets are no longer just man’s best friend, but an increasingly integral member of the family unit. Owners are humanizing their pets, aspiring to provide the best comfort and health… Read More |
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Global Animal Health Sector Advisors |
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Emily Wildes |
Roderick O’Neill |
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Matthew Lee |
Gaurav Marathe |
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