VetPartners’ acquisition of Goddard could face in-depth probe by CMA

VetPartners’ acquisition of Goddard Veterinary Group could now be referred for an in-depth investigation after the Competition and Markets Authority (CMA) found that the deal raises competition concerns in 11 local areas across Greater London.

The news follows CMA’s recent investigation into CVS’s purchase of The Vet.

York-headquartered veterinary group VetPartners is owned by the private equity firm BC Partners and operates approximately 550 sites across the UK. Goddard is a family-owned veterinary business that operates 47 sites in Greater London.

The CMA opened its investigation into the deal in November 2021. It found that the combined businesses would account for a “significant” proportion of veterinary services in each of these areas. The regulator is concerned that the combined businesses would not face sufficient competition after the merger.

In a press release, the CMA stated: “The CMA has received a number of complaints in recent years about higher prices or lower quality services as a result of multiple vets’ practices in the same local area being owned by a single company. VetPartners, like most of these corporate groups, not only owns and operates local vet practices, but also has broader activities within the veterinary sector, owning other businesses including diagnostic laboratories, locum agencies, and crematoria.”

HealthInvestor UK spoke to Goncalo Silva, chief executive of pharma and European healthcare at Connell Consulting to find out what this means for the wider market: “Overall, even if corporatization of vet practices has dramatically accelerated in the UK, it still falls short of other sub-sectors such as, for example, opticians. Even if at a local level, as result of the merger, concentration exceeds the competition threshold in ca. 20% of the cases, this will probably not block the transaction. Going forward, a concrete rule and measurement criteria has been set for next acquisitions, ” he said.

Colin Raftery, senior director of mergers, at the CMA, said: “Close to 60% of UK households own a pet and, when veterinary care is needed, the cost of care can have a significant impact on already-stretched household budgets. VetPartners’ acquisition of Goddard would result in too many vets’ practices in the same area being under the control of a single company, raising the risk of higher prices or lower quality services.Unless our concerns are addressed, we will refer this deal for an in-depth investigation to ensure that pet owners don’t lose out.”

VetPartners has five working days to offer legally-binding proposals to the CMA to address the competition concerns. The CMA would then have a further five working days to consider whether to accept these instead of referring the case to a phase two investigation.

Date published: April 29, 2022

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