TSG Consumer Buys Pathway Vet

TSG Consumer Partners has acquired a majority stake in Pathway Vet Alliance from Morgan Stanley Capital Partners (MSCP) at an enterprise valuation estimated at more than $2 billion. MSCP acquired Pathway Vet in 2016 and is maintaining a minority interest in the company.

Austin-based Pathway Vet operates over 270 general, specialty and emergency practice locations, over 85 THRIVE practices (providers of routine and lower cost vet care), and Veterinary Growth Partners, a provider of management services to over 5,500 affiliated and unaffiliated veterinary practices.

As part of this transaction, Pathway management will continue to lead the company and has retained a significant minority stake in the business.

“TSG is a leading investor in the consumer and retail space with a proven track record of building world-class brands and businesses,” said Dr. Stephen Hadley, the CEO of Pathway. “As the pet care industry evolves, TSG’s consumer and branding expertise, paired with our unique value proposition and unmatched network of doctors and staff, positions us to build upon the substantial growth we’ve been able to accomplish in partnership with MSCP. We thank MSCP for their support and look forward to working with TSG to bring the highest quality veterinary care to as many pet families as possible.”

“We have been impressed by Pathway’s tremendous success in building a market-leading veterinary services platform,” said Hadley Mullin, senior managing director at TSG. “The team’s deep M&A expertise, commitment to delivering best-in-class pet care, and extensive operating experience position them well to continue to acquire and develop top-tier hospitals and general practices. We are thrilled to leverage our consumer expertise to support the Pathway team as they further scale the business and create opportunities for veterinarians and veterinary professionals to pursue their passions.”

San Francisco-based TSG invests from $200 million to $800 million of equity in high-growth, branded consumer companies. Sectors of specific interest include beauty, fitness and outdoor, food and beverage, personal care, household, lifestyle, pet, restaurant, and retail. In January 2019, the firm closed its eighth fund with an oversubscribed $4 billion of limited partner capital commitments.

“Pathway has become a market leader in the pet care sector, and we are confident that the strong management team together with TSG will continue on this successful trajectory. We are excited to support this next phase of growth by remaining a minority partner and look forward to seeing Pathway advance its mission,” said Aaron Sack, the head of Morgan Stanley Capital Partners.

Morgan Stanley Capital Partners is the middle-market focused private equity business of Morgan Stanley Investment Management which in turn is part Morgan Stanley (NYSE: MS), a financial services firm providing investment banking, securities, wealth management and investment management services.

Harris Williams was the financial advisor to Pathway Vet and MSCP. The Harris Williams’ team was led by Geoff Smith, Whit Knier, James Clark, Tyler Bradshaw, Nathan Robertson, Dalton Hicks and Cameron Thomas of the firm’s healthcare and life sciences group, and Ryan Budlong of the firm’s consumer group.

eneral, specialty and emergency vet