Sovereign scores largest ever exit with Linnaeus sale to Mars

Kenny Wastell
08 June 2018

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Sovereign Capital has sold UK veterinary business Linnaeus Group to the veterinary health division of global conglomerate Mars.

In a statement issued by the vendor, Sovereign said the deal represented its largest ever sale and generated its strongest ever gross return.

Financial details of the transaction remain undisclosed. However, Unquote sister publication Mergermarket recently reported that the group generates EBITDA of around £20m, but was marketed based on a "much larger forward-looking adjusted EBITDA" figure.

The transaction is an exit for Sovereign's third fund and brings to a close a holding period of less than four years, during which time Linnaeus has increased its EBITDA by more than 700%, according to the statement.

Under Sovereign's tenure, Linnaeus has expanded from a single-site practice to an 87-site group. It has made 21 bolt-on deals including those of North Downs Specialist Referrals, Avonvale, VRCC Specialist Referrals and Village Vet. The business also invested in the roll-out of new sites and the development of existing facilities.

The company's headcount grew from 120 to around 1,400 under the GP's stewardship, while its range of services was also increased.

The business appointed Lynne Hill as CEO as part of a management succession strategy implemented by Sovereign. Paul Coxon was also appointed as financial director, having previously been financial director at former Sovereign portfolio veterinary business CVS. The founders of the business, Peter Renwick and Malcolm McKee, remained on the Linnaeus board of directors as non-executive directors.

Previous funding
Sovereign acquired Linnaeus (then known as Willows Veterinary Centre and Referral Service) in September 2014 in a deal estimated by Unquote at the time to have been worth in the £25-50m range.

The GP provided acquisition finance to the business in June 2017 to support the acquisition of Village Vet.

Company
Headquartered in Solihull, West Midlands, and founded as Willows in 1992, Linnaeus is a veterinary company. It specialises in the care of small animals and offers orthopaedics, ophthalmology, neurology, soft tissue surgery, internal medicine, cardiology, dermatology and oncology, as well as first-opinion veterinary services.

People
Sovereign Capital – Neil Cox (partner); Jonathan Kay (director).
Linnaeus Group – Lynne Hill (CEO); Peter Renwick, Malcolm McKee (founders).

Advisers
Vendor – Alvarez & Marsal (financial due diligence); Lincoln International (M&A).
Acquirer – JP Morgan (M&A); Freshfields Bruckhaus Deringer (legal).