PNC Mezzanine Capital - Pet Partners Case Study

Case Study: Pet Partners


How Can I Make My Small Company Into a Bigger Company?

Pet Partners, Wilton, N.Y., operates primary care and emergency/specialty care veterinary hospitals and provides them with centralized business management services. The company was founded in 2003 with the purchase of a single veterinary hospital in Manchester, New Hampshire. PNC Mezzanine Capital (PNC MC) partnered with Pet Partners’ management to recapitalize the company and position it for aggressive acquisition growth. 

The Plan

Pet Partners' management was searching for a consistent capital partner to support their strategy of acquiring and growing well-run community veterinary hospitals. They were also looking for an experienced investor who could assist them in professionalizing their organization and building the needed infrastructure to support their planned growth.  In 2010, PNC MC worked with Pet Partners’ management team to invest $17.5 million in senior and junior subordinated debt to support the company’s recapitalization and two initial acquisitions, as the initial step in a larger consolidation strategy.

The Strategy

Consistent with the original plan, Pet Partners aggressively built a pipeline of acquisition candidates comprising well-run independent veterinary hospitals with which they could partner and help grow.  PNC MC subsequently provided $11.7 million of add-on capital in several increments to support internal growth and add-on acquisitions. PNC MC also helped the company secure a scalable senior debt financing facility, which was also used to fund acquisitions. As key board members of Pet Partners, PNC MC was closely involved in the decision making needed to expand the company’s infrastructure to support the growth from 19 hospitals in 2010 to more than 60 hospitals in 2016.

The Result

Pet Partners is now one of the largest operators of veterinary hospitals in the United States. The company completed 37 add-on acquisitions during PNC MC’s investment period and increased the scale of the business more than five-fold. The successful execution of the consolidation strategy allowed the company to attract multiple potential investors. In 2016, Pet Partners was recapitalized by a strategic group that was interested in helping management accelerate their consolidation strategy. 

“Our philosophy is one of partnership. We encourage our hospitals to retain the personality and operating style that made them successful. PNC MC has demonstrated a similar relationship-driven approach to helping us grow our business. We value them not just for their investment but also for the insight they provided for the past six years as we have dramatically increased the size and value of our company.”

-Ted Sprinkle
Chief Executive Officer
Pet Partners