Veterinary corporations often known as corporate consolidators are groups that acquire privately held veterinary clinics and hospitals to increase profits and provide wide-ranging services to patients, this is known in the industry as veterinary consolidation.
Veterinary Consolidation
Corporations and private equity groups are drawn to the veterinary industry because it is a cash-based industry, allowing groups to turn a profit quickly.[i] Veterinary consolidation is an investment strategy where bigger veterinary groups buy individual practices or smaller veterinary groups, with the goal of boosting profits. These practices or smaller groups are often re-sold within 5-7 years once the business is revitalized.[ii] For corporations, a veterinary practice is considered a lucrative investment and a way to diversify their portfolio.[iii]
There are several types of consolidators including family enterprises, veterinary groups buying pet store clinics, veterinarian-managed groups, and private equity groups.[iv] These types of consolidators focus on varied aspects whether it be care or return on investment, consolidation has a large impact on the veterinary industry.
Family enterprises consists of wealthy families who purchase veterinary practices in order to diversify their portfolios and increase profits. Another type of consolidation is when veterinary groups buy pet store-based clinics. This tends to provide more affordable care. Companies benefit by having both retail and veterinary care at one location such as Thrive which is based in Petco. Veterinary-led or managed groups are when multiple veterinarian-owned clinics or hospitals merge, providing patient focused care. Lastly, private equity-backed consolidators purchase veterinary practices with a focus on maximum return on investment and rapid growth.[v]
Veterinary consolidation has become common practice over the last decade; The number of companies consolidating veterinary practices tripling from 2012 to 2022.[vi] Some of the largest veterinary consolidators and corporations include VCA Animal Hospitals, Bandfield, and BluePearl, which are part of Mars Veterinary Health, PetVet, Thrive, and NVA.[vii] According to Mars Veterinary Health, the group owns over 2,500 Veterinary hospitals and clinics in over 20 countries, with the pace of acquisition and consolidation increasing over the past two years.[viii] As of 2017, Mars Inc. now owns VCA, Bandfield, and Blue Peral Veterinary Partners.[ix]
Pros and Cons of Veterinary Corporations
There are two ways of looking at the benefits of veterinary corporations: benefits for employees and benefits for patients. One of the benefits for employees is that corporate clinics often offer manageable workloads, predictable hours, health insurance, retirement packages, paid time off, and sick days.[x] Another benefit of these corporations is that they can often afford to pay their employees more than private clinics, drawing in newly graduated veterinarians looking to pay off their loans, meanwhile private clinics struggle amid industry wide staffing shortages.[xi]
Clinics owned by a veterinary corporation must adhere to strict protocols and polices, creating a consistent and standardized customer experience and care which can benefit patients. One of the drawbacks of strict policies and procedures is that the policies can lead to less autonomy for veterinarians and veterinary technicians.[xii]
Private Practice Decisions
When deciding whether to sell to a veterinary corporation there are several elements to take into consideration. When a private practice becomes part of a corporation the practice receives more HR support and there are opportunities for upward mobility into management roles. There is also the ability to easily compare one practice to another, creating benchmarks.[xiii] On the other hand, private practices that become part of a corporation have less control over decision making such as office and business decisions, staff, and marketing. In addition, the return on investment often gets passed onto the corporation.[xiv]
Looking Forward
There is no sure way to know where the future of veterinary corporations and consolidation will go from here, but if the past is any indication veterinary consolidation will continue to have a large impact on the industry and private practices. These continued consolidations will not just impact practice owners but Vet Techs, other staff members, patients, and clients as well.
