August backs Advanced Vetcare-Rowe buy-and-build

Susannah Birkwood
10 October 2011

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August Equity has invested in a buy-and-build platform with veterinary services businesses Advanced Vetcare and Rowe Veterinary Group to merge. The Enterprise Value of the deal was around ТЃ35m.

The private equity firm plans to grow the newly-merged company organically as well as through acquisitions of further vet practices in a highly fragmented marketplace. It aims to announce new bolt-ons within the next few weeks.

August was persuaded to approach the firms due to their reputation among customers for high quality service and their strong management teams. It believes its buy-and-build expertise was instrumental to the deal's successful completion.

The investment was channelled via the August Equity Partners II fund, which launched in May 2008 with a target of £155m. Management also invested to retain a stake.

The transaction follows on from August-backed Lifeways Community Care's completion of its tenth bolt-on acquisition last month.

Debt
A debt package was arranged by HSBC to support this transaction.

Company
Established in 2007, Advanced Vetcare is the largest veterinary group in the south west, consisting of the Bath Vet Group, Unicorn Vet Group, Natures Vet and Cat Clinic. It also comprises a 24-hour veterinary hospital and online pharmacy business Pet Drugs On-Line.

Rowe Veterinary Group, meanwhile, is based in Bristol and South Gloucestershire, and houses four surgeries, including a 24-hour hospital. It was founded in 1948.

Both businesses employ around 180 people each.

People
Partner Aatif Hassan and investment director David Lonsdale originated and executed the deal on behalf of August. Terry Norris, a former director of vet group CVS, has been appointed as chairman of the company.

Advisers
Equity – Osborne Clarke, Paul Cooper (Legal); Hazlewoods, Andy Brookes, Mark Beaney (Corporate finance); KPMG, Ian Pontefract (Financial due diligence); PricewaterhouseCoopers, Kevin Morris (Tax); Lockton Companies, Philip Dearn (Insurance due diligence); Christies, Richard Lunn (Other due diligence); CIL, Giles Johnson (Commercial due diligence); Intuitus, Callum Stewart (IT due diligence).
Debt – Wragge & Co, Chris Brieley (Legal).