Deal of the Month
December 10, 2020

Carlyle and KKR Share the Blue Ribbon in December

Nicolas Cole
In the age of social distancing, loneliness is on the rise. Enter pets.

The $200 billion global pet industry is on track to grow by almost a third over the next five years, according to Bloomberg. Private equity fund managers are not missing the boom.

The Carlyle Group in November reacquired a majority stake in Manna Pro, a St. Louis-based manufacturer of pet food, treats and a wide assortment of health and wellness products, three years after selling it to Morgan Stanley Capital Partners. About 10 days later, KKR acquired Argenta, a New Zealand-based firm that conducts animal-focused healthcare research for pharmaceutical companies worldwide.

In a split decision, both deals won Moonfare’s Deal of the Month for November. The fund managers did not disclose the exact financial terms of the deals.

Carlyle’s investment was made through the firm’s $18.5 billion Carlyle Partners VII fund. Manna Pro has benefitted from the growth in the pet sector, nearly doubling its revenue under Morgan Stanley ownership and it is now eyeing international expansion.

KKR has established a strong track record of supporting healthcare companies, having invested approximately $14 billion across the sector since 2004. With healthcare spending for pets catching up to money spent on human health, animal clinics and pharmaceuticals are booming. KKR said it hopes to build Argenta into a leader in its category.

Earlier this year JAB Holdings —  a high-profile investor controlled by Germany’s richest family — acquired Compassion-First Pet Hospitals for $1.2 billion. “We are in the first 10 years of an industry that will keep growing for the next 50 years,” Olivier Goudet, one of JAB’s managing partners, said at the time. The investment group later bought National Veterinary Associates (one of the largest companies in the industry), adding pets to a portfolio that has been focused on consumer goods like coffee, luxury goods and perfume.

The rise of pet telemedicine

Venture capital funds are not missing the action. Early-stage deals are springing up across the US and Europe. In a meeting of two major pandemic trends, a number of these illustrate that the recent adoption of telemedicine services has trickled down to pets.

An example from November is FirstVet, a Swedish veterinary telemedicine startup that raised $35 million. Mubadala Capital led the round that also included Cathay Innovation as well as earlier investors OMERS Ventures and Creandum. FirstVet plans to use the funding to expand on its on-demand video consultation platform, offering advice and diagnoses for animals from dogs to horses.

Continuing the trend is Bond Vet, a New York-based veterinary clinic that ramped up its tech-enabled video consultations in response to the pandemic. The company raised $17 million in Series A funding in November from existing backer Talisman Capital Partners to, among other things, expand their virtual clinics.

Deal of the Month is a monthly series published by Moonfare to highlight exceptional deals.

Nicolas Cole

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