The National Veterinary Care Ltd (ASX: NVL) share price is up 52 per cent to $3.61 today after it revealed it has received a $3.70 per share cash takeover bid from VetPartners.
The offer is at a whopping 57 per cent premium to NVL’s last closing price of $2.36. The proposed merger still requires potential approval from NVL shareholders, the Foreign Investor Review Board, or other regulators.
According to today’s announcement VetPartners is a privately-owned business that already owns 140 veterinary clinics across ANZ and Singapore.
Historically, NVL has pursued an aggressive acquisition or roll-up strategy itself to deliver sales and profit growth for its investors. As at June 30 2019 it had acquired and integrated 99 veterinary practices across Australia.
The veterinary surgery industry is highly fragmented with many privately-owned operations with listed and mainly private equity players competing to roll them up on a profitable basis.
Formerly listed pet care roll-up Greencross for example was recently acquired for around $675 million by U.S. private equity player TPG Capital.
Given the apparent amount of money looking to invest into the sector it wouldn’t be a big surprise to see a number of new roll-up style pet care players pop up on the ASX.