Sovereign sells veterinary services provider Linnaeus in its biggest ever exit

Sovereign Capital Partners, the UK private equity Buy & Build specialist, is delighted to announce the realisation of its investment in Linnaeus Group, one of the UK’s leading veterinary services providers, in a sale to Mars Petcare’s Veterinary Health Group, a part of Mars, Incorporated. The exit, Sovereign’s largest ever sale, will generate Sovereign’s strongest ever gross return, although no financial terms are able to be disclosed. This is the seventh exit from Sovereign’s third fund, (“SCLP III”).

Sovereign backed the original veterinary platform, Willows Veterinary Centre and Referral Service, one of the leading specialist veterinary centres for small animals in the UK, in September 2014. At the time of the investment the business operated from a single hospital in the West Midlands employing c.120 staff.

Lynne Hill, a highly experienced industry CEO and veterinary surgeon, was appointed to lead the management team as part of management succession. She was joined by Paul Coxon, FD, who Sovereign had previously backed as FD for the highly successful investment, CVS. Willows’ co-founders, Peter Renwick and Malcolm McKee, also stayed on the board as non-executive directors.

Sovereign recognised the opportunity to undertake a significant Buy & Build strategy and create a market-leading veterinary group – The Linnaeus Group. Sovereign worked closely with the management team to: help deliver significant organic growth via roll-out funding; identify and complete 21 acquisitions including North Downs Specialist Referrals, Avonvale, VRCC Specialist Referrals and Village Vet; diversify its offering and expand its geographic reach.

At exit, the Linnaeus Group had:

• grown from 1 to 87 sites in England including 5 specialist referral centres, (including a £5m investment into a state-of-the-art greenfield roll-out);
• grown from a team of 120 to over 1,400 including: c.360 vets and c.160 leading specialists;
• increased EBITDA by more than 700%; and
• an enhanced breadth of specialist services including: orthopaedics, ophthalmology, neurology, soft tissue surgery, internal medicine, oncology, dermatology and cardiology.

Today Linnaeus is recognised as one of the UK’s leading veterinary services providers and is a large private referral focused provider in the UK.

Lynne Hill, CEO, Linnaeus Group, said: "Our expansion with Sovereign has been both pacey and exciting. It’s not just that Sovereign have supported our M&A activity, their commitment to investing in the best, focusing on what really matters, and providing development funding has been fantastic. We look forward to continuing to develop Linnaeus further over the years ahead."

Neil Cox, Partner, Sovereign Capital Partners, said: "From the moment we first visited Willows, the original platform, and saw the sheer quality of service and care offered, we knew that this was a really special opportunity and one we wanted to develop further. It has been a fantastic growth journey and reflects our commitment to partnering with strong businesses and management teams to deliver growth, whether organically or through strategic acquisitions. We wish the management team and the business every success for the future."

Jonathan Kay, Director, Sovereign Capital Partners, said: "This has been a superb growth story for both Linnaeus and Sovereign. Many people talk about the importance of quality but for us it is key and was integral to the entire Linnaeus team, which includes many of the UK’s leading veterinary specialists. Each business that joined the Group shared the same passion for quality and excellence and this underpinned the successful integration programme. I’m sure Linnaeus will continue to go from strength-to-strength."

Peter Renwick and Malcolm McKee, founders, Willows, said: "Sovereign recognised our premium product and were keen to build upon it. We felt they would give Willows the best chance of strengthening its position in a changing marketplace – a business that would have the funding and infrastructure to grow, and provide a secure future and exciting opportunities for the staff. The Sovereign team had tremendous knowledge of the veterinary sector and brought great enthusiasm and support to the business. The growth was far greater, and much quicker, than we ever anticipated. We’ve been delighted to contribute to the ongoing success of the Group.”