Buy-and-build specialist private equity firm Pemba Capital is to transfer its Vets Central roll-up to a continuation fund which will have secondaries investment firm TPG NewQuest as a cornerstone investor.
The continuation fund is believed to have raised $US250 million ($360 million).
This is Sydney-based Pemba’s first continuation fund and enables the firm to remain invested in Vets Central. The roll-up, in which Pemba first invested in 2021, is an investee of Pemba Fund II, which is now close to fully deployed. Pemba will now be able to return capital from the Vets Central investment to Fund II investors.
TPG NewQuest is a Hong Kong-based secondaries private equity platform which invests across the Asia-Pacific region. US-based global private equity firm TPG took an initial significant stake in 2018.
TPG NewQuest provides alternative liquidity solutions to private equity asset owners directly and indirectly. The firm will acquire private equity positions through the acquisition of portfolios or in single asset transactions and will also partner with incumbent managers to enable them to return cash to limited partners.
Pemba managing director Tom Matthews said: “This transaction allows us to continue backing Vets Central’s long-term growth strategy alongside founder and chief executive Keith Nicholls and the broader leadership team who have built an outstanding business with a clear mission and strong momentum.”
According to Matthews, Vets Central is Australia and New Zealand’s leading independent veterinary services platform.
Matthews said TPG NewQuest had been supported in its investment in the continuation fund by a highly credentialed group of global investors with the fundraising closing oversubscribed.
“With fresh equity capital and an enhanced debt facility,” Matthews said, “Vets Central is well positioned for its next phase of growth − with a clear ambition to more than double its clinic footprint over the next five years, while continuing to invest in clinical capability, talent development, and pet healthcare outcomes across Australia and New Zealand.”
Matthews congratulated Pemba investment team members Katrina Engelbert and Yvonne He for driving the continuation fund transaction.
Founded in Queensland in 2020, Vets Central had grown to more than 80 vet clinics across Australia and New Zealand. The business acquires stakes in small to medium sized veterinary practices. The company pitches its offering as a succession strategy for veterinarian-owned practices.
TPG Capital owns pet products and veterinary services business Greencross which earlier this year it was believed to be considering re-listing on the ASX. Greencross owns the Petbarn and City Farmers retail businesses plus associated vet practices. TPG is not believed to have any intention to link Vets Central to Greencross.
Image: Vets Central acquires stakes in small to medium-sized veterinary practices.