Specialty vet hospital group Ethos nears deal with PE

  • Ethos formed in 2015 through merger of four specialty vet hospitals
  • Company operates 17 locations, mostly referral-based
  • Recent vet care activity: Oak Hill’s VetCor recap, Nordic’s AniCura sale

Ethos Veterinary Health, the network of specialty veterinary hospitals, is exploring a sale, four people familiar with the matter sale.

Western Reserve Partners, a unit of Citizens Capital, is offering financial advice to Ethos, three of the people said.

The process is understood to be in its late stages and is expected to produce a transaction valued around $300 million, two of the people said.

Woburn, Massachusetts-based Ethos produces GAAP Ebitda of about $5 million, while adjusted pro-forma Ebitda is about $17 million, two of the people said. A third person placed adjusted Ebitda in the mid-$20 million range.

One sponsor in the process is Denver’s Revelstoke Capital Partners, three of the people said.

Ethos was created in 2015 through fusion of four specialty hospital groups — IVG Hospitals in the northeast; Premier Veterinary Group in Chicago; Wheat Ridge Animal Hospital in Denver; and Veterinary Specialty Hospital of San Diego.

Led by CEO Ames Prentiss, Ethos has 17 locations that provide care for dogs and cats. The company’s specialty hospitals are largely dependent on referrals from primary care veterinarians.

Ethos specialists include those focused in anesthesiology, dermatology, emergency and critical care, internal medicine, medical and radiation oncology, neurology, ophthalmology, radiology and surgery. Certain locations also offer sports medicine and rehabilitation therapy, while some also have a veterinary blood bank, according to the company’s website.

Ethos also has three full-service diagnostic labs and the only veterinary-only compounding pharmacy, which personalizes medications and dosages for pets, in New England. It provides continuing education content for veterinarians and technicians through VetBloom.

Other vet deals

Most recent sponsor investment in the veterinary sector has been for providers concentrated on primary care and not specialty care services for pets.

That includes Oak Hill Capital Partners, which in June won the Jefferies-run process for vet hospital network VetCor. In connection with the recap, existing investors Harvest Partners and Cressey & Co reinvested alongside Oak Hill.

Financial terms weren’t disclosed, but the sponsor-focused auction was anticipated to produce a valuation north of $1.5 billion, Buyouts reported.

Nordic Capital in June sold AniCura to Mars in a deal valuing the European chain at close to €2 billion ($2.36 billion) including debt, Buyouts reported.

OMERS Private Equity in June 2017 prevailed in the auction for National Veterinary Associates, while existing investor Ares Management reinvested in the vet chain.

Representatives of Ethos declined to comment, while those with Western Reserve and Revelstoke did not immediately return requests for comment.

Action Item: Reach Ethos at info@ethosvet.com.