Private investment comes to another multi-practice group

Continuing a long trend of private equity investments in veterinary practice chains, Morgan Stanley Global Private Equity has invested in Pathway Partners.

Pathway Partners announced at the same time that its Austin, Texas-based veterinary management company and operator of veterinary practices has expanded to 35 clinics in nine states.

Pathway Partners CEO Shawn McVey says the company fills a void for today's practice owners.

“Practices today are larger, more expensive and take management expertise to operate well,” McVey says. “Further, many younger veterinarians are saddled with large debt, do not want to own practices and seek work life balance. Pathway Partners is the solution to this problem.”

Long-time veterinary business analyst John Volk says this transaction is just the latest in a long line of outside investors seeing value in veterinary hospitals.

“Nearly all of the veterinary practice roll-ups are funded by private equity once they have enough critical mass to attract investment,” Volk says. Citing NVA, Vet-Cor, PetVet Care Centers and Blue River and their private equity owners, Volk says there's a lot of private equity money chasing the veterinary field.

“Transaction activity is limited by lack of properties (practice groups), not lack of potential investors,” he says. “Every time a practice group comes up for sale, there are many prospective bidders.”