CVC acquires Inflexion-backed Medivet in GBP 1bn deal

The deal sees Inflexion make returns of 3x money on the investment, according to a source close to the situation.

Inflexion and CVC declined to comment when approached by Unquote.

CVC intends to support the company's organic and inorganic growth following the investment. The GP is deploying equity via CVC Fund VIII, which held a final close in July 2020 on EUR 21.3bn. The fund generally deploys equity tickets of EUR 200m-1bn and invests in businesses with enterprise values of EUR 1bn-5bn, according to Unquote Data.

Inflexion invested in Medivet via its 2014-vintage Inflexion Partnership Capital I in December 2016. The GP's Partnership strategy focuses on minority investments, deploying tickets in the GBP 15m-75m range. The deal is the fifth realisation from the fund and also marks Inflexion's sixth exit of 2021.

At the time of Inflexion's investment, Medivet posted revenues of GBP 67m and EBITDA of GBP 12m. Inflexion partner Mark Williams took a seat on the Medivet board of directors following the investment.

During Inflexion's investment period, the company doubled its employee headcount to more than 3,000. The company had 160 practices at the time and now has more than 350 sites, having increased its presence via organic growth and M&A. The company is now present in Europe and has acquired more than 40 practices in Germany and Spain.

The deal is expected to close in Q4 2021.

Recent deals in the veterinary and pet care sector include Axcel's acquisition of Denmark-based VetGruppen from Dansk Ejerkapital (formerly Industri Udvikling) in June 2021. The boom in pet ownership during the coronavirus lockdowns of the past year and a half has also bolstered PE interest in pet retailers, with deals including Alvarez & Marsal Capital's EUR 260m buyout of Croatia-based Pet Network in July.

German pet products retailer Zooplus has seen significant take-private interest from large-cap investors, with EQT and KKR joining the bidding race following Hellman & Friedman's initial offer in August 2021. KKR confirmed earlier this week that it was no longer in discussions with the company after H&F increased its offer, as reported.

Company
Medivet provides veterinary health services, including check-ups, emergency care, diagnostics services and surgery. Founded in 1986, the company is headquartered in Watford and has operations in the UK, Germany and Spain.

According to its latest publicly available financial statements, the company generated revenues of GBP 193m for the financial year to 30 April 2020, versus GBP 171m in the 2018/19 financial year. The company posted EBITDA of GBP 23m in 2019/20, versus GBP 20.8m in 2018/19.

People
CVC Capital Partners – Dominic Murphy (managing partner, co-head of UK investments); Phil Robinson (managing director).
Inflexion – Mark Williams (partner); Andrew Neville (investment director); Rob Dagger (assistant director).
Medivet – Deirdre Burns (CEO).

Advisers
Equity – Jefferies (corporate finance); Freshfields Bruckhaus Deringer (legal); PwC (financial due diligence); LEK Consulting (commercial due diligence); Mansfield Advisors (commercial due diligence); Goldman Sachs (corporate finance).
Vendor – HSBC (corporate finance); Travers Smith (legal); KPMG (financial due diligence); EY (tax).

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