Good Company

Pet Care Deals Rise 22 Percent to 60 as Private Equity Chases Health and Services

Capstone Partners counted 60 pet care deals year to date, up 22.4 percent, with sponsor activity up 56.3 percent and the money concentrated in vet and health, services, supplements and premium brands while public buyers pulled back.

By Good Company Editorial Desk

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The News

Pet care dealmaking is rising while dealmaking in the broader consumer products industry stays weak. Capstone Partners, in its Pet Care Market Update released November 5, counted 60 announced or completed pet care transactions year to date, up 22.4 percent year over year. The firm said active strategic buyers and renewed capital deployment from private equity firms have fueled the resilience, and that the Services segment has shown renewed momentum, with boarding, daycare and grooming underpinning gains to date.

The buyer mix is the story inside the total. Sponsor activity surged 56.3 percent year over year and spearheaded the acceleration, according to Capstone. Strategic acquisition activity rose a more modest 6.1 percent, with private strategic deals jumping 15.4 percent while public companies pulled back from the market by 28.6 percent. Capital deployment into new platforms ticked higher by four deals, and add-on activity also increased by four transactions.

Capstone pointed to Chewy as an example of the strategic direction. The firm listed Chewy's Modern Animal deal in April 2026 at $400 million, or 3.2 times EV to revenue, and SmartPak Equine in October 2025 at $175 million, or 2.2 times EV to sales. Capstone said large buyers such as Nestle, Mars and General Mills will likely pursue emerging brands with differentiated positions to offset slower organic growth and fill portfolio gaps.

The report also spotlighted services consolidation at a smaller scale. Capstone advised Barking Hound Village, an Atlanta based provider of dog daycare, boarding and grooming, on its combination with Puppy Haven Pet Resort to form Pack Pet Care. Terms were not disclosed. Pack Pet Care said at its September launch that it starts with 18 locations in Atlanta and Dallas, having tripled its footprint over the past year, and handles more than 255,000 reservations a year.

Why It Matters

Buyers are not chasing pet in general. They are chasing specific kinds of pet businesses. Capstone said private equity has focused new investments on specialized, enthusiast driven niches tied to premiumization and wellness, where a target offers differentiated products, infrastructure, intellectual property or multi-channel distribution that would be difficult for a large strategic to build on its own. The target list the firm named is specific: supplement developers, animal health ingredient suppliers, specialty pharmacy operators, premium branded products and niche service platforms.

Within add-ons, the concentration is even clearer. Capstone said sponsors are primarily targeting Vet and Health, at 43.8 percent of add-ons, and Services, at 31.3 percent, to expand service density and specialty care offerings in portfolios they already own. That matches the consumer logic the firm laid out. Treats, food and supplements with science backed formulations and clinical grade ingredients that offer measurable health outcomes have reached mainstream demand, the firm said, drawing buyer attention because of high barriers to entry and strong margin profiles.

The pressure side matters too. Capstone said tariffs have had a devastating effect on hard goods companies with major Asian sourcing, while consumables companies have had more success negotiating with suppliers and customers to moderate the impact. The firm expects brands to shape portfolios around both premium and value oriented offerings into 2027. In short, the deal market is rewarding health, services and consumables, and is much less forgiving of imported hard goods with no pricing power.

"Where consumers spend their money, M&A activity will follow. Millennials and Gen Z own the majority of pets and they read labels looking for clean certifications, nutritional information, and brand authenticity," said Capstone Managing Director Tom Elliott, the lead contributor to the report. "The humanization of pets dictates that all of these generations will continue spending on health and wellness for their pets in the same way they do for themselves."

The Numbers

  • Pet care M&A: 60 announced or completed transactions year to date, up 22.4 percent year over year (Capstone Partners, Pet Care Market Update, November 5, 2026)
  • Sponsor activity: up 56.3 percent year over year, spearheading the sector acceleration (Capstone)
  • Strategic activity: up 6.1 percent overall; private strategic deals up 15.4 percent; public buyer activity down 28.6 percent (Capstone)
  • New platform deployment: up by four deals year over year; add-on activity also up by four transactions (Capstone)
  • Add-on mix: Vet and Health 43.8 percent of add-ons, Services 31.3 percent of add-ons (Capstone)
  • Chewy and Modern Animal: April 2026, $400 million, 3.2 times EV to revenue, as listed by Capstone
  • Chewy and SmartPak Equine: October 2025, $175 million, 2.2 times EV to sales, as listed by Capstone
  • Pack Pet Care: 18 locations at launch in Atlanta and Dallas, footprint tripled over the past year, more than 255,000 reservations a year, per the company; Barking Hound Village and Puppy Haven combination terms were not disclosed
  • Market context: U.S. pet industry expenditures reached $158 billion in 2025, up 3.7 percent, and are projected to reach $165 billion in 2026 (APPA, 2026 State of the Industry Report)

What It Means For You

If you own a pet brand and you might sell in the next two years, read the target list as a checklist, not as a compliment. Buyers in this cycle are paying for proof that is hard to copy: a formulation or ingredient position with evidence behind it, a pharmacy or clinic relationship, a premium brand that holds price, or a distribution setup that reaches customers in more than one channel. If your growth story is mainly a good product and a social account, you are not yet describing what Capstone says sponsors are underwriting. Build the proof now, in retention, repeat rate, margin and channel data, while you still control the timeline.

If you run a boarding, daycare or grooming business, the Pack Pet Care example is the template to understand. Two Atlanta rooted operators combined into an 18 location platform and are now pitching other Southeast owners on a flexible path: stay involved, step back gradually, or transition out fully. You do not have to sell to benefit from knowing that offer exists. Document your occupancy, staffing and local reputation in a form a buyer can diligence, because fragmented services is exactly where Capstone says roll-up activity is concentrating.

If you buy for a retailer, watch where ownership changes land on your shelf. When a supplement or premium brand changes hands to a sponsor building a platform, expect sharper distribution asks and a faster push into channels the buyer already owns. Ask new owners directly what changes in the first year for pricing, exclusivity and independent retail support, before the next reset, not after it.

What To Watch

Watch whether strategic buyers return at the pace Capstone expects. The firm said strategic dealmaking will likely strengthen gradually as large buyers hunt differentiated brands to offset slower organic growth. Private strategics are already up 15.4 percent, but publics are down 28.6 percent, so a return by public buyers would change both volume and pricing in 2027.

Watch services density deals next. Boarding, daycare and grooming underpinned gains this year, and platforms that can prove local density in a metro, not just a location count, will be the easiest for sponsors to justify as add-ons.

Watch hard goods for the opposite signal. If tariff pressure stays where Capstone describes it, expect fewer clean exits for Asian sourced hard goods and more reshaping toward premium and value consumables. The next Capstone count will show whether 60 deals was a catch-up or the start of a longer sponsor led run.

Sources

  • Capstone Partners, Pet Care Market Update, November 5, 2026: https://www.capstonepartners.com/insights/report-pet-care-market-update/
  • Capstone Partners, Capstone Advised Barking Hound Village on its Combination with Puppy Haven to Form Pack Pet Care, 2026: https://www.capstonepartners.com/transactions/capstone-partners-advised-barking-hound-village-on-its-combination-with-puppy-haven-to-form-pack-pet-care/
  • Pack Pet Care, Puppy Haven and Barking Hound Village Launch Pack Pet Care, PR Newswire, September 23, 2026: https://www.prnewswire.com/news-releases/puppy-haven-and-barking-hound-village-launch-pack-pet-care-a-family-of-local-dog-daycare-and-lodging-businesses-run-by-pet-people-302886762.html
  • American Pet Products Association, U.S. Pet Industry Reaches $158 Billion in 2025, Poised for Continued Growth in 2026, March 26, 2026: https://americanpetproducts.org/news/u.s.-pet-industry-reaches-158-billion-in-2025-poised-for-continued-growth-in-2026