Who Actually Buys Pet Companies (And What They're Looking For)

Pet M&A hit 532 transactions in 2025, a 41% increase over 2024. Every founder got the same LinkedIn messages: "We're always looking at interesting companies in the space." Most of those messages led nowhere. The difference between a fishing expedition and a real acquisition process isn't the initial outreach. It's what happens after.

Understanding who actually invests in pet companies is table stakes. Understanding who acquires them, what they're optimizing for, and how to position yourself as a target is how you turn an inbound inquiry into an outcome you control.

This is the M&A landscape from the seller's chair.

What 532 Deals Actually Tell You

Pet industry M&A volume looks healthy at 532 transactions in 2025. The number hides the real story.

Deal volume increased 41% year-over-year, but so did buyer selectivity. Multiples compressed across the board. PE deals averaged 12.2x EBITDA in H1 2025, down from 16.8x in 2024. Strategic deals dropped to 8.1x from 13.0x over the same period.

The market isn't cooling. It's recalibrating. Buyers who paid 2021 prices for 2021 growth stories learned expensive lessons. The businesses that still command premium multiples share characteristics: recurring revenue, defensible positions, clean operations, and clear growth trajectories. Everything else sits on market longer and sells for less.

For founders, the implication is nuanced. If you've built something good, capital is available. If you've built something average, the bid-ask spread may be wider than you expect. One industry advisor put it directly: the returns sellers want should come from fundamental growth, not hoping for a high multiple.

The 2026 outlook suggests more activity as interest rates stabilize and tariff uncertainty resolves. But the selectivity isn't temporary. This is the new normal.

Three Types of Buyers (And What Each Actually Wants)

Pet industry acquirers segment into three categories. Each operates on different timelines, optimizes for different outcomes, and evaluates your business through different lenses. Pitching a PE firm the way you'd pitch a strategic is a waste of everyone's time.

Private equity wants cash flow and consolidation. PE firms evaluate your business as either a platform or a bolt-on. Platform deals command higher multiples because they anchor a rollup strategy. Bolt-ons get lower multiples because they're filling gaps in an existing platform's footprint.

PE firms represented 51.9% of deal volume but 77.5% of capital deployed in the first half of 2025. They're concentrating on bigger bets. Frontenac's Digs Dog Care completed 15 add-on acquisitions in 2025, buying dog daycares and boarding facilities to build regional density. The Nutriment Company acquired ten companies across Europe in raw pet food. This is the PE playbook: find fragmented markets, aggregate, optimize operations, exit at a higher multiple than entry.

If your business generates predictable cash, operates in a consolidating market, and doesn't require continuous R&D or heavy customer acquisition spending, PE may be your buyer. If your business needs constant reinvention to stay competitive, PE will pass.

Corporate strategics want capability, not revenue. Mars Petcare, Nestle Purina, Colgate-Palmolive's Hill's division, General Mills through Blue Buffalo, and Zoetis approach acquisitions differently. They're buying something they can't build fast enough internally.

Rover's $62 million acquisition of Mad Paws wasn't about Mad Paws' Australian revenue. It was about importing Rover's platform into a new geography with an established local player already in place. IPN's acquisition of Ultra Premium Direct gave the British manufacturer DTC capability and French market access without building either from scratch.

Strategic buyers pay premium prices when the capability gap is wide and time-to-market matters. They pay less when you compete directly with their existing business. And they move slowly. The founder who thinks they're six months from a strategic exit is usually eighteen months away, minimum.

Continuation vehicles are the third option. When PE hold periods mature but exit conditions aren't favorable, assets transfer to new vehicles. This means founders may see new ownership without a traditional sale process. If your company was PE-backed and the original fund is approaching the end of its lifecycle, expect conversations about continuation options before a formal sale process launches.

For a deeper understanding of how these different buyer types value businesses, see our breakdown of what actually drives pet company valuations.

How to Tell If Acquisition Interest Is Real

Every founder with a LinkedIn profile has received the message: "We're always looking at interesting companies in the pet space." Most of these are fishing expeditions. Learning to read the signals saves time and emotional energy.

The fishing expedition looks like: vague timelines, no mention of specific process steps, requests for information without an NDA, conversations that recycle the same questions meeting after meeting. Strategic buyers run perpetual market scans. PE firms build relationship pipelines years before they're ready to act. Being on a list isn't the same as being in a process.

Serious interest looks different. Someone mentions their investment committee or strategic review board. They introduce you to a diligence team or operating partners. They ask specific valuation methodology questions rather than general "what are you looking for" inquiries. They provide a process outline with approximate timelines.

The clearest signal: a banker or M&A advisor gets involved. When buyers engage advisors, they're spending money. Spending money means a mandate exists.

Red flags that suggest window shopping:

• Multiple conversations over months with no forward progress
• Requests for detailed financials before signing an NDA
• "We'll circle back when the time is right" without defining when that would be
• Interest that spikes when you announce funding or a big customer win, then goes quiet

Green flags that suggest real process:

• Clear description of their typical deal timeline
• Introduction to investment team members beyond the initial contact
• Questions about your management team's plans post-acquisition
• Discussion of deal structure before you've even indicated willingness to sell

If someone is serious, they'll tell you what the process looks like. If they can't describe the process, they're not in one.

What Buyers Evaluate Beyond the Financials

EBITDA gets you in the room. What moves the multiple happens in the details.

Customer concentration is a deal-breaker. If your top three customers represent 40% or more of revenue, expect a discount or an earnout structure that ties payment to retention. If a single customer represents 25% of revenue, that's a red flag buyers will price into the deal. The concern is simple: what happens if that relationship ends? Concentrated customer bases create binary risk that buyers don't want to underwrite at full price.

Recurring revenue changes valuation math. Subscription models, auto-ship programs, and service contracts produce predictable cash flow. A pet food company with 60% of revenue on subscription gets valued differently than one with 60% wholesale to retail. The revenue quality is higher because customer acquisition costs amortize over longer relationships.

Founder dependency discounts the price. If you are the customer relationships, the product vision, and the operational brain, buyers have to price in transition risk. The question they're asking: does this business work without the founder? Companies with a second layer of leadership, documented processes, and institutional knowledge command premiums. The business has to transfer cleanly.

Data hygiene matters more than founders expect. Clean books, clear add-backs, and audited financials (if you're above a certain size) signal operational maturity. Messy data creates uncertainty. Uncertainty gets priced into the multiple. Buyers want to verify claims quickly. If diligence requires forensic accounting to understand your numbers, expect either a lower price or a longer process.

Sales trends need granularity. Buyers want to see 12-24 months of sales data by customer and channel. They're looking for patterns: growth trajectory, seasonality, customer cohort behavior. Totals aren't enough. The story has to hold up when they segment the data.

Positioning Your Company Before You're Ready to Sell

Most founders start exit preparation when they decide to sell. By then, the changes that meaningfully impact valuation take too long to implement. The work needs to start 12-24 months before you want an outcome.

Build recurring revenue now. Converting one-time purchasers to subscription takes time. If you're selling pet products without a subscription option, you're leaving value on the table. If you're running a services business without a membership component, same problem. Buyers will value the recurring revenue you have, not the recurring revenue you could theoretically build.

Diversify your customer base. If you're over-concentrated, accept the trade-off: slower growth in exchange for a more balanced revenue mix. A diversified business at 8x beats a concentrated business at 6x with a two-year earnout tied to retaining a customer you don't control.

Document what's in your head. Operational playbooks, supplier relationships, customer history, institutional knowledge. Everything that would need to transfer in an acquisition should exist outside your brain. This isn't busy work. Buyers literally pay more for businesses that don't require founders to stick around.

Build your second layer. Hire or promote people who can run operations without you. The management team depth signals whether the business scales or collapses post-acquisition. Buyers want to meet your team, not just you.

Clean up financials early. Work with an accountant to prepare clean books with defensible add-backs. If you've been running personal expenses through the business, stop. If your categories don't make sense, reorganize them. The discount for messy financials is larger than most founders expect.

Hire advisors before you need them. A good M&A attorney, an experienced accountant, and potentially an investment banker should be identified (if not engaged) before serious conversations start. Scrambling to build a team during a live process puts you at a disadvantage.

What Happens After the Deal Closes

Every M&A article ends at the check. Founders care more about what comes next.

Under PE ownership, expect rapid operational integration. The playbook is consistent: ERP and CRM unification, accounts payable automation, standardized reporting, performance dashboards, weekly status meetings. If you're a platform acquisition, expect to be heavily involved in identifying and integrating add-on acquisitions. If you're a bolt-on, expect to integrate into an existing platform's operations within months.

PE ownership means professional management. Decisions run through processes. Reporting requirements increase. The informality of founder-mode disappears. For some founders, this is a relief. For others, it's suffocating.

Under strategic ownership, your business becomes part of a larger organism. The capability they bought you for transfers to the parent. Your brand may continue independently, absorb into their portfolio, or sunset entirely depending on strategic fit. Don't assume brand continuity. Ask explicitly during negotiations.

Your team integrates into their structure. Some roles become redundant. Some people get expanded opportunities. The realities of corporate hierarchy replace the flatness of startup culture.

The founder's role changes. Advisory positions and Chairman titles are common for founders post-acquisition. Day-to-day operations transfer to professional management. The company you built operates differently under new ownership. This isn't failure. It's the natural outcome of selling.

Earnouts often disappoint. Earnout structures tie a portion of the purchase price to post-acquisition performance. The problem: you no longer control the variables that drive performance. Strategic decisions get made by new owners. Resources get allocated according to their priorities. Meeting earnout targets while lacking operational control is harder than the projections suggest.

The emotional reality nobody discusses: It's not your company anymore. The identity shift catches founders off-guard even when the financial outcome is good. Building something and running something you sold are different experiences. Factor this into your timeline and expectations.

The Current Buyer Landscape

The buyers actively writing checks in 2025 fall into predictable categories. Knowing who's active helps you target conversations and evaluate inbound interest.

Strategic acquirers with active mandates: Mars Petcare continues opportunistic capability acquisition. Colgate-Palmolive's Hill's division expanded into fresh pet food through targeted purchases. General Mills builds out Blue Buffalo's portfolio. Nestle Purina and JM Smucker evaluate deals selectively. Zoetis remains active in veterinary technology and diagnostics.

PE platforms actively rolling up segments:

• Frontenac's Digs Dog Care: Dog daycare and boarding aggregation across the US
• Inverness Graham's Treat Planet: Specialty and premium treats consolidation
• The Nutriment Company: Raw and premium pet food across Europe
• Alpine Investors' Antelope: Pet services platform building

What's getting acquired: Pet services businesses with recurring revenue. Premium and functional pet food with clear positioning. Freeze-dried and raw pet food brands. Veterinary technology that solves labor shortage problems. Anything with subscription or membership revenue models.

What's harder to sell: Undifferentiated pet food competing on price. Hardware businesses without software margins. Companies with concentrated customer bases. Brands without clear premium positioning. Businesses that require the founder to function.

The market rewards operational excellence and clear positioning. Founders who've built defensible businesses with recurring revenue and diversified customer bases will run competitive processes. Everyone else waits for the right buyer to emerge.

You can browse the full archive of pet industry analysis at The Underbite Insights.

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