Building one of the most successful veterinary consolidators in the US

Imperial Capital launched AmeriVet in 2017 with the goal of building a leading and differentiated veterinary consolidator in the growing U.S. pet healthcare market. Having previously partnered with and successfully sold VetStrategy in Canada, the Imperial team was confident it could replicate that success in the United States.

“With VetStrategy, we started by acquiring an existing business and helping it grow over time,” recalls Imperial Capital Managing Partner Justin MacCormack. “AmeriVet was different. It was our first Back, Buy, and Build platform investment, meaning that we built the company from the ground up.” To do so, Imperial leveraged the VetStrategy team’s industry experience, operational infrastructure, and relationships. The company’s CEO played a particularly important role in launching the business and served on AmeriVet's board of directors.

After establishing its headquarters in San Antonio, Texas, AmeriVet acquired its first veterinary clinic in Gardner, Massachusetts in June 2017. Not long after, Imperial installed Thomas Thill as CEO as well as the rest of the company’s executive team, including a chief financial officer, a chief operations officer, and an executive vice president of corporate development, all of whom played a significant role in building the business.

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The Imperial team are incredibly smart, have great operational experience, and provide a ton of strategic value. And while they were always there to help, they also made sure to give us the space we needed to run business.

Thomas Thill
CEO, AmeriVet

Over the years that followed, Imperial Capital worked closely with Thill and his management team to successfully implement numerous value creation projects. These included:

- - Developing a joint venture acquisition structure that differentiated AmeriVet from other consolidators and created clinic-level alignment with veterinarians to incentivize performance
  - Implementing operational processes and systems to drive organic growth, establishing performance-based incentives across the organization, and developing data monitoring capabilities to track and compare results in real time at each clinic
  - Growing and refining the acquisition process, which enabled the corporate development team to manage acquisition pacing of up to $25 million of EBITDA or 50 clinics per year
  - Working with OPTrust and the lender networks to expand the financing capabilities necessary to support the company's growth initiatives

Thanks to these and other efforts, AmeriVet quickly built momentum. Within its first full year of operations, it acquired 16 clinics. The business continued to grow year over year and, by 2021, had 139 clinics across 32 states, employed 2,300 people nationwide, and had grown its revenues to $298.4 million and its EBITDA to US$64.5 million. “One of the keys to AmeriVet's success was its disciplined approach to acquisitions,” says MacCormack. “We helped the company achieve an average acquisition multiple of 9.3x EBITDA, making it a significant value creation lever for the business.”

“Imperial was a fantastic partner,” recalls AmeriVet CEO Thomas Thill. “Not only did they do a lot of strategic work upfront to help us position ourselves in a crowded market, they were also integral in putting together a seasoned board with the right experience to help accelerate our growth. The Imperial team are incredibly smart, have great operational experience, and provide a ton of strategic value. And while they were always there to help, they also made sure to give us the space we needed to run business.”

By the fall of 2021, a combination of record levels of activity and high valuations had created an attractive environment for a potential sale of the business. That, combined with AmeriVet's strong performance, future capital needs, and a desire to create liquidity for the company's investors, led the board to decide to pursue a sale process.

Imperial Capital subsequently introduced AmeriVet's CEO to a number of potential acquirers, including AEA Investors, a leading global private investment firm known for its interest in the veterinary industry. In February 2022, AEA acquired the business for $1.6 billion, representing 24.8x EBITDA and generating an approximate 6.4x gross Multiple of Capital (MOC) and a 58.7 percent gross Internal Rate of Return (IRR) for Fund VI investors.

“It was a fantastic outcome for Thomas and his team, for our investors, and for everyone at Imperial,” says MacCormack. “We couldn’t have been happier.”

Thill agrees. “Justin and the team did an amazing job of bringing the business to market at just the right time to secure a sale that was at the top end of our expectations. It was everything we could have hoped for and a fantastic way of capping off our five-year partnership.”

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