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Private Equity Vets

Discussion in 'General Chat' started by LJ_, Feb 10, 2021.


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Do you mind if the practice you use is owned by a private equity firm or is independent?

  1. I don't mind.

    46.2%
  2. I prefer independent veterinary practices.

    53.8%
  3. I prefer private equity veterinary practices.

    0 vote(s)
    0.0%
  1. LJ_

    LJ_ PetForums Junior

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    I’m doing research into veterinary practices owned by private equity.

    I would like to get some feedback from the forum. My question is; Do you mind if the veterinary practice you use is owned by a private equity firm or is independent/privately owned?
     
    #1 LJ_, Feb 10, 2021
    Last edited: Feb 11, 2021
  2. LJ_

    LJ_ PetForums Junior

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    If you do not know what private equity is please read below.

    *******

    The article below is written based on the US market.

    https://vetidealist.com/private-equity-veterinarians/

    What is Private Equity?
    Private equity is money from funds and investors used to directly invest or buyout companies. The money is from individuals who are wealthy enough to be considered “accredited” or from institutional investors that invest for others. These individuals or investors have money they want to grow but are looking for an alternative to stocks, bonds, real estate, etc. PE firms have a short-term horizon and are often looking to buy businesses, improve them with investments in needed equipment, improve their operations, and increase their net profit margin.

    PE funds generate revenue through management fees, annual profits from the business, and then profit in a sale. Management fees can be 1.5-2% of all revenue. The ultimate goal is to maximize the return on that initial investment and re-sell the business for a profit within 5 to 7 years.
     
  3. Happy Paws2

    Happy Paws2 PetForums VIP

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    As long as it's a good vet and I can trust them to look after my pet I don't care.
     
  4. Nonnie

    Nonnie PetForums VIP

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    Can you provide UK data please.
     
  5. My private vets are great and know me and Jasper (my cat) very well. They both seem to know what they are talking about and I am reassured by there many years of experience being qualified as vets, I'd hate to think of them being taken over by another vets. The only thing that has changed in the last 3 years is a group practice opened up in my area who provide 24 hour veterinary care and they took over as emergency out of hours vets from the vets I use and other vets up to a 10 mile radius of the area I live in. Before the group practice opened the vets I use used to provide the out of hours emergencies for everyone registered at there practice.
     
  6. LJ_

    LJ_ PetForums Junior

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    Thank you @Happy Paws2 for your feedback. Would you mind voting that the top of the page please?

    Currently in the UK one of the larger private equity vet practices is VetPartners and they generate £50 million profit every year which it takes out of the UK. It is expected that they will float or sell-out in a few years. Similarly to the real-estate housing sector where properties are 'flipped'. With this type of business they have an immediate priority to generate vasts amounts of profit, so that the valuation of the company is as high as possible, so they can sell at the highest price. (this is normally ebitda X17 to get the selling price). ebitda = Earnings before interest, taxes, depreciation, and amortization

    In time, this will mean that the prices we pay will be less competitive due to their monopoly and unfortunately will result in some owners being in a position where they can't afford to pay for expensive treatments and will have to make some heart breaking decisions.

    VetPartners currently own 400+ practices in the UK. This could mean that 1000's of animals already are not getting the treatments they need due to higher costs. This of-course will result in many animals and pets being put to rest, to avoid them suffering.

    This research will show how much of the veterinary care sector is already owned by private equity firms, what percentage of independents remain and how far off we are from having an industry dominated by a few firms which have a monopoly.

    The current owners of VetPartners are a private equity firm called BC Partners and in addition to owning the veterinary clinics own business which manufacture equipment, pharmaceuticals, manufacture and supply pet and animal food and own companies which sell pet and animal insurance. They really have every corner covered to exploit the UK market as much as possible.

    I feel it's our responsibility to avoid a future where prices increase to the maximum levels consumers are willing to pay and secure a future where there is price competitivity in the market, for the benefit of the animals and pets we love.
     
    #6 LJ_, Feb 11, 2021
    Last edited: Feb 12, 2021
  7. LJ_

    LJ_ PetForums Junior

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    Thank you for your information @rawpawsrus

    The vets I use market themselves as independent but I found out that they are owned by a private equity firm. They also own the 24hour hospital in the area.

    Would you mind letting me know the private/independent vet you use and I can check if they are still independent? If you don't want to state it here please send me a dm.

    .. also to add, the private equity owners of course are primarily interested in how much the practice can make for them in profit. The staff, vets, nurses, administration etc are there 99.9% of the time because of the love and compassion they have for animals and pets.

    thanks!
     
  8. They are definitely a private run practice as I know both the owners who are husband and wife and are also the vets :) They do have 3 other vets working for them at the practice who they hired many years ago.
     
    LJ_ likes this.
  9. MilleD

    MilleD PetForums VIP

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    Perhaps this bit needs to be said more.
     
    LJ_ likes this.
  10. LJ_

    LJ_ PetForums Junior

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    That's great, I hope that remains that way and they keep the practice independent.

    Many independents are being persuaded by the valuations they can get from the private equity firms who want to acquire them.
     
  11. LJ_

    LJ_ PetForums Junior

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    I'm finding it a challenge to get good data from the UK. BC Partners and VetPartners do not openly discuss these acquisitions and misrepresent them as investments in the independents.

    The lack of data I think is due to the UK market being smaller and most of it has already been acquired by one major player VetPartners/BC Partners.

    All the veterinary clinics (400+) of them belong to an investment vehicle called BCEC X. This is a fund of companies worth €7 billion Euros and is an abbreviation for BC European Capital X. The fund was created in 2018 and is expected to run, acquiring more businesses until around 2023 at which time it will be liquidated or floated on the stock market. There are no UK owners of this fund. The fund is registered in Luxembourg.

    Some articles of interest ;

    VetPartners to expand into Europe (2019)
    https://www.reuters.com/article/uk-...vetpartners-idUKKBN1KV19A?edition-redirect=uk

    New private equity owner for vet group (2018)
    https://www.insidermedia.com/news/yorkshire/new-private-equity-owner-for-vet-group

    Ares backs BC Partners' takeover of VetPartners (2018)
    https://www.reuters.com/article/uk-...vetpartners-idUKKBN1KV19A?edition-redirect=uk

    BC to buy £700m VetPartners in sector's biggest UK takeover (2018)
    https://news.sky.com/story/bc-to-buy-700m-vetpartners-in-sectors-biggest-uk-takeover-11463449
     
    #11 LJ_, Feb 11, 2021
    Last edited: Feb 11, 2021
  12. lymorelynn

    lymorelynn UN Peacekeeper in training
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    Until fairly recently I thought my vet was independent. Recently however, I have discovered that they belong to a group called Independent Vet Care. I don't know if this a private equity group or not but last year I had to argue my case to get the particular vaccine I wanted for my kittens - in the past my vet would have just got it in even though it isn't the one they normally use. I used to get a discount on vaccinations too but did not get it last year due to it being a 'special order'. My lovely vet nurse - I've known them all at the practice for many years - was even incensed on my behalf
     
  13. LJ_

    LJ_ PetForums Junior

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    Yes, Independent VetCare is a private equity backed company. It was setup by the same group August Equity who originally backed VetPartners.

    https://www.bvca.co.uk/Media-and-pu...life-sciences-and-biotech/Independent-Vetcare

    https://www.augustequity.com/portfolio/vetpartners/


    Independent Vetcare/ IVC Evidensia own around 1,500 practices (wow!). Ebitda was £48 Million (profit) for 2019. It seems common for practices to market themselves as independents, when they are not.

    Independent Vetcare are now called IVC Evidensia after merging with Evidensia.
    https://ivcevidensia.co.uk/our-story

    as of, February 9, 2021

    Pet care firm IVC Evidensia gets 3.5 bln euro private funding
    https://www.reuters.com/article/ivc-ipo-idUSL8N2KF716

    IVC Evidensia, is owned by private equity firm EQT
    https://www.eqtgroup.com/

    -----

    It's common for staff in the practices to be proud of the investment that they have received, as it has given them the opportunity to improve the clinic with better equipment, more staff and IT systems. They don't realise that they're being used/exploited to amass wealth for investors, many of whom do not live in the UK. (That's good that your vet nurse stood up for you and helped you get the vaccine you wanted, I misread your comment)

    The main group of 'investors' are actually banks, who have lent the money to buy these practices and until the loans are paid back are the rightful owners. One of the largest of these investment funds is called Ares Management.

    https://www.aresmgmt.com/

    Due to their collective purchasing power they will try to push certain treatments, medicines and vaccines. This results in higher prices and less choice, as you've experienced.

    Thank you for your information @lymorelynn
     
    #13 LJ_, Feb 11, 2021
    Last edited: Feb 11, 2021
  14. lorilu

    lorilu PetForums VIP

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    In the rural area I live in I thought all the vets were privately (what you call independently) owned. I was shocked to find out recently that at least one local clinic had been bought out by a big company. The clinic still passes itself off as a privately owned clinic, there is no info on their website about being owned by a corporation and the name and bills (I process their water bills and property taxes) are still in the original owner's name.I hadn't used that clinic I mention above in years because back in the day the owner vet made her major profits in cutting off cat's toes and when I found that out, way back when it was suggested to me that I have my cat's toes cut off, I immediately left the clinic and told her why. The one benefit, after the buy out, I found out was the corporation ceased the practice of declawing cats at that clinic.

    I am in the US so the details won't be of use to you but I will answer your question that I prefer to use private (independent) vets. My reason is because, while I realize I am generalizing, it is my opinion that eventually, corporations of these buy out situations start putting the pressure on to raise the profit margin. When the pressure becomes all about money, the quality of care falls off.

    Having said that, if the practice I currently use for the last 20 years suddenly sold out, I would not immediately start looking around for a new practice, because my vet (a staff vet, but the owners are local and ve owned the practice for 40 years) has been caring for my cats all their lives, they are old now and used to the vets, staff and the place and I wouldn't want to make them change. But when it comes time in the future for new pets, I would look elsewhere.
     
    LJ_ likes this.
  15. LJ_

    LJ_ PetForums Junior

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    Hi @lorilu thanks for your input.

    I've been looking into a group in the UK called Linnaeus who are owned by the US brand mars.com which operate 1000's of vet practices in 55 countries and own about 50 brands in the animal and pet food sector.

    I agree with you that the quality of care falls off. Personally I've experienced this in the ICU setting where I feel there were not enough staff for the night shift and even thought that they euthanized our cat to relieve pressure due to higher than average workload and drain on their resources.

    Because these companies need to have a good stock valuation or intend to float with a high price it's their job to make the businesses as efficient and profitable as possible. Due to this, as you say the quality of care will drop off, which should not be acceptable to us. The issue for me is we don't know what is a happening under our noses when corporations are choosing to be deceptive in their marketing, i.e pretending to be independent but are part of a chain.

    I look forward to finding out the percentage of private independents that are left in the UK, I wonder if it's more than 10%

    https://gbr.mars.com/made-by-mars/petcare
    https://www.linnaeusgroup.co.uk/
     
    #15 LJ_, Feb 11, 2021
    Last edited: Feb 11, 2021
    lorilu likes this.
  16. lorilu

    lorilu PetForums VIP

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    Yes. That clinic I spoke of is very carefully still presenting itself as owned and operated by long time locals. The vet who owned it before is still the head vet and the clinic is still listed in her name. Major deception.
     
  17. LJ_

    LJ_ PetForums Junior

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    I have something similar with mine. There are 3 vets who are department clinical directors, though they are being presented on the company website on the homepage as the company owners/directors.. very sneaky and misleading.. I've checked the company out and the only 2 actual company directors are the ones from the VetPartners corporation.
     
  18. LJ_

    LJ_ PetForums Junior

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    Would you mind voting please at the top of the page? thank you.

    I spoke with @rawpawsrus and after a little bit of research it turns our her vet has recently sold-out and is now owned by the private equity firm EQT via the Linnaeus Group.

    https://www.eqtgroup.com/
     
  19. LJ_

    LJ_ PetForums Junior

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    @lorilu I don't know if you voted or not, if not could you at the top of the page please? thank you.
     
  20. lorilu

    lorilu PetForums VIP

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    I did not. I don't participate in polls. It's just not my thing. :)
     
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