Livingston veterinary business sold as part of £100m Pets At Home deal
The deal will allow Pets At Home to focus on customer-facing activities across its stores and services through its First Opinion vet services.
The five sites being sold to Linnaeus, which is part of Mars Petcare, are Veterinary Specialists Scotland in Livingston, Dick White Referrals in Cambridgeshire, Anderson Moores in Hampshire, Northwest Veterinary Specialists in Cheshire and Eye Vet, also in Cheshire.
The agreement will see Pets At Home receive £80m in cash on competition – expected early next year – and a further £20m sum if certain financial targets are hit.
Peter Pritchard, chief executive of Pets At Home, said: “This disposal does not deviate from our core focus of providing customers with affordable, convenient, engaging and flexible pet care solutions through our growing online platform and estate of 440 First Opinion veterinary practices and 451 stores.
“The disposal represents a great outcome for all of our stakeholders. Linnaeus is a well-regarded operator of veterinary practices with a strong and established track record of practice management.
“We hold them in high regard, and they will be a great home for our highly-skilled colleagues in the specialist group, underpinned by an ongoing commitment to specialist multi-disciplinary veterinary care, supported by Mars.”
He added: “For our shareholders, the disposal proceeds provide the group with additional resource to accelerate growth across our customer-focused pet care platform.”
The group has been pushing to offer more services inside its warehouse-style stores, with services including grooming parlours, while online services include dog walking and cat sitting bookings.
News of the move came just a day after the company revealed it had bought telephone and video appointment vets business The Vet Connection (TVC), as more pet owners turn to online services during the pandemic.
Bart Johnson, chief executive of Linnaeus, said: “We are delighted to welcome our new colleagues and these fantastic and highly-respected referral practices into the Linnaeus family and to grow our offering further, taking another step towards making an even better world for pets.”
Analysts at brokerage Shore Capital noted: “The statement highlights that the pet care strategy is unchanged and ‘is part of the continuing focus of on customer-facing activities’.
“These comprise the online and retail stores and the First Opinion vet practices. Initially, the strategy was to supplement the First Opinion practices with a nationwide network of up to ten specialist referral hospitals, from five today. The company only added the fifth specialist centre in Scotland in the last 12 months.”
“We need to rework forecasts to account for the disposal and the change to earnings and cash consideration to the cashflow.”
They added: “We like the Pets strategy which mixes the products and services and the self-help levers available to the company, through increased personalisation from data from the VIP loyalty club.”
Last month, Pets At Home reported total group revenue growth of 5.1 per cent to £574.4m for the 28-week period to October 8.