Investment firm buys stake in veterinary clinic chain

Published on March 27, 2019

Another company has entered the veterinary market by buying a major stake in a chain of veterinary clinics.

JAB Holding Company logo

JAB Holdings announced that it had signed a definitive agreement with the private equity firm Quad-C Management Inc. to buy the latter's stake in Compassion-First Pet Hospitals, which operates 41 specialty, emergency, and general medicine veterinary clinics in the U.S. The agreement is based on a total enterprise valuation of $1.2 billion. The exact amount of the purchase was not disclosed, but a JAB spokesman said it gave the buyer majority control, according to a Feb. 25 article in the Financial Times. Founded in 2014, the chain has expanded from a small group of veterinary hospitals in the Mid-Atlantic region to dozens more locations in 13 states, mostly in urban and suburban areas.

Compassion-First Pet Hospitals logo

Veterinary service providers who are currently investors in the company will maintain a significant stake going forward, and Compassion-First's management team, including founder and CEO John Payne, will also continue to be significant investors and lead the company in the next phase of its development, according to a Feb. 25 JAB press release. Payne is former CEO of Banfield Pet Hospital and past president of Bayer Animal Health North America.

This is JAB Holdings' first foray into the animal care market. According to the Financial Times, JAB Holding Co. is owned by the Reimann family, one of the richest families on the planet—worth at least $19 billion, according to Forbes. Since 2012, according to the Financial Times, JAB chairman Peter Harf "has embarked on an aggressive expansion into the coffee business, as well as casual dining. JAB now owns or backs a number of companies, including Keurig Dr Pepper, Pret A Manger, and cosmetics maker Coty."

Mars remains the world's largest operator of veterinary hospitals after acquiring VCA Animal Hospitals in the U.S. for $9.1 billion in 2017 and, in 2018, the Linnaeus Group Ltd. and AniCura Holding AB, which both have clinics in Europe.