There are several indicators of an industry that’s attractive for M&A, including rapid industry growth, high profit margins, and non-consolidation. These attributes show potential buyers that there’s plenty of opportunity to invest in and make good returns on an individual or multi-location practice in the industry. And one such opportunity lies in veterinary M&A.
Read on to learn about key veterinary M&A trends offered by KPMG. Whether you’re a veterinary practice owner or potential investor, you might find it food for thought.
The State of Veterinary Care in 2025 and Beyond
In 2023, KPMG reported that the amount that Americans spent on vet care for their pets in had risen 26% since 2019, just four years and one pandemic later. By 2028, the organization projects that number to grow another 45%, jumping from from $37B to $54 billion.
The COVID-19 pandemic as well as various cultural factors have strengthened the bond between pets and their parents, and pet parents have come to expect the same quality of healthcare for their pets as they receive for themselves.
Veterinary practices are also offering more services than before, like root canals and cancer surgery. Plus, pet insurance expenses are rising, which leads to more vet visits. Pet parents are also getting younger. And this younger demographic opts for more frequent visits to chain veterinary clinics.
Which leads to the next point from KPMG: “The veterinary sector has attracted substantial acquirer interest for several decades as large players have capitalized on the sector’s clinic fragmentation.”
Veterinary M&A Is on the Rise
Even in a cautious economy, private equity has remained bullish (no pun intended) on the veterinary space, and M&A is expected to skyrocket once the economy stabilizes. For now, here are a few quick facts:
More than 50% of the veterinary industry is still non-consolidated. There are roughly 20,000 clinics that are independently owned.
Of the remaining clinics, 29% belong to aggregators (like private equity) and 19% to corporate companies (like Petco’s Thrive and PetCoach).
The number of veterinary clinics increases every year.
The five states with the most clinics (California, Texas, Florida, New York, and Pennsylvania) account for one-third of the nation’s total clinics and generate $18 billion in vet expenses.
New Trends in the Veterinary Industry
KPMG also offers a few emerging trends to consider in the veterinary space. Adopting new ideas like these could help increase your clinic’s value in veterinary M&A.
Artificial Intelligence
The American Veterinary Medical Association claims that AI is poised to transform veterinary care. While the industry may have been slow to embrace AI, the rapid development and adoption of new tools is making veterinary practices more productive. While some AI tools are used to make clinic operations run more efficiently, medical tools can leverage AI as well. There are projects underway to forecast the spread of Lyme disease and more.
Subscriptions
Healthcare practices are exploring new ways to implement a subscription model. Harvard Business Review says that “such pricing models are likely to become an increasingly important feature in the health sector to stimulate valuable innovation and to improve access to new treatments.” A veterinary subscription might include basic pet care, simple surgeries, televet services and referrals to more specialized clinics.
Telemedicine
The pandemic made telehealth access skyrocket, and the option can apply to pets, too. Now, pet parents can tune in from home to receive diagnoses for their pets. This feature also helps free up space and service providers at in-person clinics.
At-home testing
Similar to at-home virus tests or hormone tests, new at-home screening for pets is emerging. This might come as a urine or blood sample-based test.
Engagement platforms
As the saying goes, there’s an app for that. And offering a virtual platform where veterinarians and service providers can connect with pet parents is becoming a non-negotiable. An engagement platform might offer appointment reminders, prescriptions, and learning resources.
Marti Law Group specializes in helping veterinary and other healthcare practices navigate M&A, creating business models and legally-compliant contracts. Contact us to learn more about what our business can do for yours.
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