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Category: JAB

FTC Takes Second Action Against Private Equity Firm, Increased Scrutiny of Veterinary Hospital Acquisitions

June 30, 2022 Admin

The FEDERAL TRADE COMMISSION (FTC), which seeks to protect consumers and promote competition, has recently taken a SECOND ACTION (within…

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Posted in: FTC, Hospital Groups, JAB, PRIVATE EQUITY, Veterinary

Federal Trade Commission Intervenes in Private Equity Firm’s Acquisition of Veterinary Hospitals, Citing Antitrust Concerns

June 18, 2022 Admin

The FEDERAL TRADE COMMISSION, which seeks to protect consumers and promote competition, has ordered JAB Consumer Partners, to divest veterinary…

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Posted in: FTC, Hospital Groups, JAB, PRIVATE EQUITY, Veterinary

Jab to Acquire Figo, Expands Pet Insurance Platform

November 1, 2021 Admin

The JAB Holding Company (JAB) recently ANNOUNCED that Independence Pet Holdings, (an integrated, full-stack pet insurance platform owned by JAB…

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Posted in: Insurance, JAB

Leading Animal Hospital Group NVA Acquires Ethos Veterinary Health

September 9, 2021 Admin

National Veterinary Associates (NVA) which owns nearly 1,200 independently managed veterinary hospitals providing specialty, emergency, and general medical care for…

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Posted in: Hospital Groups, JAB, Veterinary

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THE CORPORATIZATION OF VETERINARY MEDICINE

The acquisition of private-owned animal hospitals by corporate entities such as veterinary consolidators has accelerated over the last few years and is largely invisible to most pet owners because consolidators view the corporatization of a practice as a marketing liability. This has potentially serious implications for competition, pet healthcare costs and may worsen the labor shortage of veterinarians and veterinary technicians.
Are Consolidators Helping or Hurting Veterinary Medicine?

MANY CORPORATE PRACTICES LED BY NON-VETERINARIANS
Study conducted by CARE for Pets™ reveals that the majority of veterinary consolidators are led by non-veterinarians. These corporate entities employ a large infrastructure of managers and support teams and require significantly greater revenue to be profitable. Today, approximately 1 out of every 4 (based on recent trends, may reach more than 70% within the next 10 years) general veterinary practices in the U.S. are owned by corporate consolidators.
CEOs of Veterinary Consolidators and Hospital Groups

 

IS QUALITY OF CARE IMPACTED BY COMMISSION-BASED PAY?
Today, approximately 2 out of 3 full-time associate veterinarians are paid on "production" (commission). Compensation models for veterinarians consist either of a fixed salary, salary plus commission, or 100% commission. This has potentially serious implications on the quality of veterinary medicine and on pet healthcare costs. A new hospital group startup is bucking the trend on commission pay and will compensate doctors "without the pressure of production-based salary."

 

IS PRIVATE EQUITY RAISING HEALTHCARE COSTS FOR PETS?
Private equity (PE) involvement in veterinary medicine (owns many corporate consolidators) has substantially increased in recent years. PE strategy (prioritize short-term profits) is to consolidate the pet care industry through practice acquisitions in order to enhance value and drive higher earnings. In human medicine, raising prices at hospitals has been a common strategy after a private equity acquisition. Current trends in human medicine indicate that pet healthcare costs could potentially significantly increase due to private equity ownership of veterinary practices.
How Private Equity is Impacting Human Medicine

 

IS INDUSTRY CONSOLIDATION THE ROOT CAUSE OF THE PROBLEM?
A new hospital franchise offered by a leading brick-and-mortar retailer "will help many veterinarians who want to own a practice and otherwise couldn’t because of the consolidation within the industry." Within approximately the next decade, the vast majority of animal hospitals will most likely be owned by a select few corporate consolidators.
PetSmart to Offer In-Store Practice Franchise to Veterinarians

 

CASE STUDY: Lack of Ownership Transparency in Veterinary Practices

Study conducted by CARE for Pets™ reveals many veterinary consolidators communicate misleading statements about ownership information on their individual practice websites which is most likely to create a false impression to pet owners that the practice is independently owned and locally operated. Most veterinary practices acquired by corporate consolidators often retain their original company name.
Is Your 'Local' Animal Hospital Corporate-Owned?

IVPA EXCLUSIVE INTERVIEW: WHY LOCAL MATTERS
CARE for Pets™ interviews the President of the Independent Veterinary Practitioners Association (IVPA) about the importance, benefits, and value of independently owned & locally operated veterinary practices to pet owners and their companion animals, and to the local community.
Interview with Dr. Bonnie Bragdon of the IVPA

WILL PRIVATE EQUITY FIRMS TAKEOVER PET INDUSTRY?
Today, private equity (PE) firms control thousands of veterinary practices, major pet retailers, pet insurance companies and pet product manufacturers. Other pet care startups are founded and led by former employees of private equity firms and it is not disclosed in a transparent manner.
Private Equity Investments in Pet Care Industry

HEIGHTENED SCRUTINY OF PRIVATE EQUITY M&A DEALS
Today, approximately 3 out of 4 specialty and emergency clinics in the U.S. are owned by corporate consolidators. The Federal Trade Commission (FTC) says "private equity firms increasingly engage in roll up strategies that allow them to accrue market power off the commission’s radar."
FTC Intervenes PE Acquisition Citing Antitrust Concerns

 

ROLL-UPS MAY EXACERBATE VETERINARIAN SHORTAGE
Corporate entities such as private equity (PE) firms engage in roll-ups (buys several companies in the same market and merges them together) to enhance value and drive higher earnings. Veterinary consolidation leads to fewer and larger firms (less choices for workers). Its prioritization on short-term profits may pressure veterinarians to see high numbers of patients and adhere to appointment time restrictions. These working conditions may exacerbate the labor shortage of veterinarians and veterinary technicians.

 

ACCELERATE POSITIVE CHANGE IN PET CARE INDUSTRY
As "the internet's most trusted consumer advocate for the pet care industry,"™ CARE for Pets™ "seeks to empower pet owners to effect positive change in the pet care industry in order to provide the best care for your pet."
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