Pets at Home, the pet store owned by US private equity group Kohlberg Kravis Roberts, will announce on Tuesday that it is stepping up its veterinary services with the acquisition of Vets4Pets.
No value will be disclosed for the deal, but it is thought to be in the £30m-£50m range, providing a windfall for Peter Watson, the former Vision Express and Specsavers executive, who founded the business 12 years ago.
Nick Wood, chief executive of Pets at Home, said the retailer could eventually have more veterinary practices than it has Pets at Home stores.
“In the future, the opportunity for Pets at Home is to have more vet, and potential vet locations than store locations,” said Mr Wood.
Pets at Home, which has 346 stores, currently runs veterinary practices, in joint venture with vets, in 116 stores, under the Companion Care brand. It also operates 86 in-store grooming salons, under “The Groom Room” brand.
Vets4Pets will add another 93 veterinary practices, taking the total to 210, still a fraction of the 2,500 veterinary practices serving small animals in the UK. The two veterinary businesses had pro-forma sales of £100m in the year to March 31.
Mr Wood said that as well as having a veterinary practice in every Pets at Home store, the group could open vets in standalone locations.
The bolstering of Pets at Home’s veterinary services was a key plank of developing its offering, he said.
“Part of developing a retail proposition going forward is it has to be more than product,” he said. One way of defending retail businesses against the growth of online shopping was “to have a very strong services proposition. In our world, services are vet services and grooming salons. If you add both of those together, it gives extra reasons as to why our customers should go to stores in the long term.”
Companion Care and Vets4Pets provide services to a network of joint venture vet surgeries. Companion Care receives a share of the vets’ turnover, in return for services.
Mr Watson will remain with the business following the acquisition, while Vets4Pets’ operational centre will remain in the East Midlands.
Pets at Home was acquired by KKR three years ago, in a deal valuing the retailer of dog collars, cat flaps and rabbit hutches at £955m.
It followed a highly competitive auction between some of the world’s biggest private equity groups for Pets at Home, which persuaded its owner, Bridgepoint, to ditch plans for an initial public offering.
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