There’s been a lot of chatter about possibly seeing a big veterinary services company like the newly formed Mission Pet Health or Vetcor go public soon. There was a lot of noise about this during the crazy days of 2021 when the stock market was soaring and the industry was growing rapidly during COVID. It’s cooled off since mid-2022 as the market softened and interest rates went up and the talk died down.
For some background, there hasn’t been a publicly traded vet services business since Mars bought out VCA in 2017 and took it private. Let’s dive into what initial public offerings are all about and what they could mean for the vet world.
What is an Initial Public Offering (IPO) and Why ‘Go Public’?
An IPO occurs when a company sells stock or ownership to investors and has the stock traded on a public stock exchange like the NYSE or NASDAQ. This means anyone, individuals or institutions, can own a piece of the company through the purchase of these publicly traded shares. Going public enables a company to tap into a wider pool of potential investors, and access financial resources for growth and expansion that aren’t as available to private owned companies.
What makes Win Lippincott an expert on this topic?
- 10 years advertising vet practices
- Chief Growth Officer at a corporate buyer
- Dozens of practice transactions
The Public vs. Private Veterinary Services Landscape
Currently, the public veterinary market is dominated by companies in diagnostics, pharmaceuticals, and distribution—think big names like IDEXX, Zoetis, Patterson and Elanco (Covetrus used to be in this group but got bought by a private equity firm and went private).
But most vet service companies you know are still private, owned by private equity firms or family offices. Major players like Mission Pet Health (the combined SVP and MVP) NVA, and Vector, are getting so big that they’re starting to think about going public. There’s more on this below, but here’s the short version: Those companies are worth billions now, and they are getting so large that it’s hard for another private equity firm to buy them. So, the owners will eventually look to cash out or ‘exit’ by selling shares to the public.
The Motivations for Veterinary Services Companies to Go Public
Why do mullti-billion dollar companies like NVA or Mission Pet Health need to raise more capital in the first place? It boils down to how these businesses expand—they grow by acquiring other hospitals.
Here’s how the financials usually play out:
- In 2021, buying a top-quality veterinary practice could cost 12 to 18 times its profits. Today, those valuations are still pretty steep, ranging from 8 to 14 times profits.
- Companies like NVA or Mission Pet Health can usually secure loans amounting to about 6 times the profits of the practice they want to buy.
- To cover the rest (3 to 7 times profits), they need additional funds, which can come from four main sources: a) the cash flow their existing operations generate, b) new equity capital, c) issuing TopCo equity in the purchasing company to the sellers as part of the deal, or (d) having the Seller retain some ownership stake in the hospital they are selling
Even though these large veterinary businesses bring in strong cash flows, they also have hefty debts to manage, and they need to pay interest on all that debt. Given their continuous drive to acquire new practices and fuel growth, these companies frequently need to infuse fresh capital into their operations. For instance, JAB, the family office that runs NVA, was all-in on funding their purchases of Compassion First, and subsequently both, Ethos and Sage, by putting in more equity as well as borrowing from their lenders.
NVA and similar companies are growing so large that their investors will soon turn to public markets for additional capital. This shift will likely happen once the businesses are financially stable enough to access these markets.
Financial Necessities of Going Public
There comes a point when businesses grow too large for private equity to continue funding them. Consider a hypothetical scenario:
Imagine a veterinary services company with 600 locations, each generating an average revenue of $3.5 million, totaling $2.1 billion in revenue. The company has 21 percent hospital margins and 17 percent margins at the corporate level, resulting in over $350 million in EBITDA. If the company was valued at 18 times EBITDA, their market value would be close to $6.5 billion dollars.
This begs the question: How does a private equity firm finance a $6.5 billion veterinary company? Realistically, a firm could borrow around 6 times EBITDA, which would provide $2.1 billion. However, this still leaves a substantial $4.4 billion to be covered by equity. Even with prior owners and management potentially rolling over some equity, the price tag may be too big for a PE firm to afford it. A company of this size would likely need to go public.
On top of that, even the largest private equity funds hold between $20 to $25 billion and usually engage in 10 to 15 deals per fund, so their average investment per deal would be around $2 billion—well short of the $4.9 billion needed in this case. They could tap their limited partners for some direct investments, but it gets even more complex.
The bottom line is this: The ability for PE to continue to buy the businesses becomes more challenging as these companies continue to grow. Once the consolidator becomes too big, the current investors of the business will create an alternative to exit their investments: the IPO.
The Current State & Future of Veterinary Services IPOs
News about a potential IPO for NVA began in early to mid-2021. But with ongoing market volatility, it looks like we won’t see any IPO until late 2026 or 2027. Stock prices for growth companies took a hit starting in early 2022—thanks to inflation, rate hikes, and the Ukraine war—which makes an IPO a risky move. As inflation has come down in 2024/25, interest rates have come down from their peaks but remain high and the stock market is struggling to interpret the impact of the Trump tariffs and other economic uncertainty.
The veterinary sector, which boomed in 2020 and 2021, is also finding it tough to keep up that growth. Publicly-traded companies like Zoetis and IDEXX saw their stock prices drop significantly in 2022 and 2023. Those stock prices have continued to stagnate in 2024 with IDEXX seeing some recent momentum in mid-2025. The economic uncertainty in the first year of the Trump administration combined with declining invoice growth is delaying potential IPOs for veterinary services businesses.
What causes volatility in the stock market?
The market is a complex mix of investors with different motivations. Broad economic trends can affect the entire market, and specific factors may only influence particular companies or sectors.
ie: Supply & demand, government policies, inflation, regluatory changes, market indicators, wars, natural disasters, interest rates, GDP, & much more
The Pros and Cons of Veterinary IPOs
So, is it beneficial for the vet market if these veterinary service businesses go public? Will it boost the valuations of individual practices? The truth is, it’s not that straightforward and it depends on a number of factors.
When veterinary services businesses go public, we get a clearer picture of what the market’s view of the industry’s valuation with a daily perspective on the value of the public companies. If a few consolidators go public, you’ll see different EBITDA multiples based on the public companies individual performance and get a sense of how much the biggest names in veterinary services are really valued. Will the public markets value these consolidators more than what the current, private recapitalizations are valuing them? Or will these companies be valued similarly to the values that PE firms pay for recapitalizations? Only time will tell.
One thing is clear: public market valuations of these big consolidators will set a new standard for how much these businesses are worth, and that’s going to influence what private equity firms are willing to shell out for them.
When more of the larger consolidators going public, we expect the number of independent consolidators to drop. There are already over 35 private equity-backed consolidators, and they haven’t been overly active in buying each other out. NVA’s purchases of Sage and Ethos were one-off deals and there has not been much consolidator-consolidation in 2023/24. The combination of SVP and MVP at the end of 2024 into Mission Pet Health is not likely to start a trend since these two companies had the same private equity owner, making the consolidation more likely. Nevertheless, public companies can access capital more easily, which is likely to speed up the consolidation of consolidators. This will reduce the number of solo players in the field.
Read our Quarterly Market Update
Our market commentary report gives you exclusive findings and insights you can’t get anywhere else
- Current Industry Trends
- Corporate Buyer Behavior
- Macroeconomic Impact
- Valuations & Multiples
- Takeaways for Owners
- And More
When Will These IPOs Happen?
When can we expect these IPOs to roll out? It’s hard to pin down the exact timeline, but our team predicts that by late 2026 or sometime in 2027, we’ll see one or two veterinary companies go public. That movement will likely trigger a wave of acquisitions among the consolidators, where larger consolidators will snap up smaller ones.
This trend might not be the best news for individual practice owners, especially those running smaller operations. Today, there are a handful of buyers for a $1.5 to $2.0 million, 3-doctor practice. However, as the number of consolidators diminishes and the ones remaining grow bigger, their interest in smaller practices could wane. We believe that there will always be a robust market for 4+ DVM practices but the level of competition for smaller practices has already started to decline.
Anticipated Changes in the Veterinary Market Landscape
As consolidators expand and become more profitable, they’ll start tapping into the public stock market to raise the capital they need to keep growing. If the global economy levels out, we expect to see these IPOs happening in late 2026 and 2027. These IPOs will change the market as we know it: public consolidators will likely purchase the smaller players, and we’ll likely see fewer consolidators over time.
Veterinary consolidators, whether private or public, have a lot of resources and experience they use when they’re buying practices like yours. We’ve seen too many practice owners try to sell their businesses independently and end up on the losing side of the deal. Don’t let this happen to you. After dedicating years to building your practice, you deserve the best possible outcome. At Ackerman Group, we’re here to ensure you get that. Whether you want to sell today or in five years, there’s no better time than now to start planning.
Plan your sale with confidence, partner with Ackerman Group now to secure the best outcome for your veterinary practice.