Street Talk can reveal EQT dealmakers, Frank Heckes and David Forde, have agreed terms with sell-side adviser Jefferies and the buyout firm has been anointed preferred bidder.
EQT was understood to have bid upwards of $1.4 billion in the first round – giving VetPartners the same multiple implied by TPG Capital’s sale of a 45 percent stake in GreenCross last year. However, limited partner sources suggested the final agreed price was slightly lower following a period of more in-depth due diligence.
As this column reported last week, binding offers for the up-for-grabs veterinary chain, which makes about $131 million a year, were received from EQT and rival private equity firm Affinity Equity Partners.
The fast-tracked auction was being run by Jefferies with expectations of a circa $1.4 billion sale. Affinity Equity Partners had Macquarie Capital’s bankers while EQT was being advised by Morgan Stanley.
VetPartners has 267 clinics in Australia, New Zealand, and Singapore, which helped it make $661 million in revenue and $131 million EBITDA for the 2023 financial year. The business, whose global parent is National Veterinary Associates, first caught EQT’s attention in August.
The buyout giant has chased furry deals aggressively over the past decade. It has owned European and North American vet roll-up IVC Evidensia and its 2500 clinics since 2014. It also invested in British insurer ManyPets and tag-teamed with the Abu Dhabi Investment Authority to take London-listed veterinary drugmaker Dechra private for £4.46 billion ($8.9 billion).
EQT opened a shop in Australia in February 2020 with just three people. It’s since grown to over 50, deployed $8 billion on deals in the country, and is among the firms that considered a run at ASX-listed Healius, the healthcare services provider subject to a potential takeover by Australian Clinical Labs. EQT also teamed up with Regal Partners last November to try to acquire Perpetual.
Jefferies has been shepherding suitors through a tight timetable, thanks to NVA’s plan to float the leftover business. Interested parties, which were understood to include Affinity, Goldman Sachs’ private equity division, and Permira Private Equity, were given only a few weeks to make up their minds about VetPartners and asked to lob non-binding indicative bids by the end of August.
With the sale nearing completion, California headquartered NVA plans to split the $US6 billion-a-year ($9 billion) global business into two separate units: Ethos Veterinary Health would have 145 animal hospitals and $US2 billion annual revenue; and NVA would have 1400 locations including animal general practices, equine hospitals and pet resorts.
Image by: EQT Partners