Metalmark Capital‘s single-asset deal demonstrates the all-weather nature of the opportunity in pet care.
The New York-headquartered firm, which was founded in 2004 by the principals of Morgan Stanley Capital Partners, has lifted Innovetive Petcare into a special purpose vehicle worth $450 million, Secondaries Investor understands.
The continuation fund was led by Glendower Capital and funds advised by Neuberger Berman Private Markets, according to a press release dated 18 January, and enjoyed the participation of existing Metalmark investor Lexington Partners and other secondary investors.
Innovetive, founded in 2015 and headquartered in Austin, Texas, is an acquirer and operator of veterinary practices. As of 31 December, Innovetive operated 62 clinics across the southern and eastern United States.
This deal comes less than a year after Waterland Private Equity moved its portfolio company United Petfood out of its sixth fund and into a continuation pool. Intermediate Capital Group, a significant investor in that process, cut an equity check of between $500 million and $600 million, affiliate title Buyouts reported at the time. The total value of the deal was unclear.
Waterland invested in the company in 2016. United Petfood, founded in 1994, makes dog and cat food, biscuits and snacks.
The pet care segment has been an attractive prospect for allocators during covid-19 dislocation as pet purchases and adoptions have risen dramatically.
In May 2020, Clayton, Dubilier & Rice announced it would acquire Radio Systems, which owns a portfolio of brands in the pet products space. While that deal didn’t utilize the secondary market, CD&R Partner Kenneth Giuriceo did point to the enduring demand for such products and services.
“The market for pet care is large and growing, with attractive long-term secular tailwinds and demonstrated recession-resilience,” said Giuriceo.
In June of the same year, Petlove, a Brazil-based online pet shop serving the country’s local market, announced that L Catterton’s Latin America fund invested in the business, underscoring the global growth potential for the segment.
Jefferies acted as financial advisor and Davis Polk & Wardwell acted as legal counsel to Metalmark.