Pet Care Market Update – July 2023

Spike in Pet Ownership Fuels M&A Activity Across Key Segments of the Pet Care Market

Capstone’s latest Pet Care Market Update reports that though M&A volume has moderated year-over-year, it continues to outpace pre-pandemic levels with average year-to-date (YTD) volume for 2017-2019 standing at 40 transactions.

As projected in our March 2022 Pet Care Market Update, the heightened pet adoption rates, humanization trends, and e-commerce penetration seen during the COVID-19 pandemic have continued to fuel unprecedented growth in the sector. In particular, the trend toward pet humanization has been a boon for players in the space, with many pet owners opting to invest in high-quality foods and services for their pets.

Despite this growth, the sector has faced challenges, including increased input costs and transportation expenses. However, strategic and private equity buyers remain optimistic about the sector’s long-term prospects, driving healthy M&A activity and continuing to pursue firms that are well-positioned to capitalize on the growing demand for pet care products and services. Capstone expects sector M&A volume to stay robust through the second half of 2023.

Also included in this report:

• A look at how return-to-work initiatives are reshaping demand across sector sub-verticals.
• Which Pet Care market segments are outperforming year-to-date.
• Analysis of how rising interest rates have affected private equity acquisition appetite and what to expect from PE operators through year end.

Capstone Partners’ Consumer Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the consumer and retail industries. Our team partners with leading mid-to-large sized Pet Care businesses that serve growing end-markets. For more information on the Pet Care market trends featured in this report or to speak with one of our Consumer Investment Banking Team members about how to grow, value, and/or sell your company, contact us today to start a conversation.