From treats to tech: trends in M&A activity across the pet business world
by Sam Farnfield
Improved market conditions and renewed investor confidence are driving mergers and acquisitions in the pet space. What are the most sought-after segments?
Thanks to its resilience, the pet industry has long been an attractive sector for investors – and this has continued with great conviction into 2025. We take a closer look at the activity so far this year and consider which areas are attracting particular attention.
Strong global rise in volume
Globally, the number of mergers and acquisitions (M&A) across the pet sector is projected to exceed 500 deals in 2025. This is a 41% increase from 2024. Europe, in particular, has been an epicenter for activity, with around 115 pet-sector deals in the first half of 2025, according to PitchBook. Of these, 61 deals were registered in the first quarter of the year and 54 in the second quarter.
The increasing deal volume reflects improving market conditions and renewed investor confidence, which is evident across sectors. However, it is important to point out that many of the pet deals so far this year have been mid-market or bolt-on acquisitions. This is reflected in a lower average deal value (where disclosed). Nevertheless, high-quality assets have continued to command high multiples.
Financial and strategic interest
Sustained interest in the pet sector continues from both financial and strategic investors. Strategic acquirers are seeking growth, capitalizing on synergies and filling any portfolio gaps via M&A. Meanwhile, private equity (PE) funds are both investing fresh capital into the pet sector and harvesting earlier investments.
Interest in the sector remains high among both investors who own (or have owned) pet businesses and those who are actively looking to enter the space. Just a few examples providing evidence of this are the Swiss-based PE firm Partners Group’s acquisition of UK pet food manufacturer MPM Products, British international investment firm BC Partners’ majority investment in supplement and treat brand PetLab Co., and the acquisition of Australian fresh dog food producer Prime100 by Colgate-Palmolive’s Hill’s Pet Nutrition.
Investors’ areas of focus
Pet food and treats hold the highest share of deal volume (approximately 70% of pet deals in recent years have been in food), but investor activity has also been buoyant in veterinary services, pet health and wellness (e.g. the UK’s VetPartners’ acquisition of Pet Chemist Online), and pet tech. This activity also extends across the value chain (e.g. German meat processor Westfleisch’s entry into pet treats last year).
Moreover, as noted in other consumer sectors, some pet-related players are taking a proactive role in creating ‘platforms’ through roll-up – acquiring businesses and holding them in the same portfolio – for instance, The Nutriment Company in the UK.
Health, wellness and nutrition
Based on market insights and recent pet deals, key themes can be identified that underpin many investors’ decisions in the pet space. The hot segments and themes range from pet health and wellness to pet services, pet experiences and pet tech.
Reflecting the convergence of consumer sectors with adjacent areas (from health to tech and media), we expect a sustained focus on pet health and wellness (supplements, pet medications, diagnostic services and insurance). This is particularly relevant in the context of the COVID pandemic as the pets purchased during 2020-2021 are beginning to age.
Similarly, in line with human trends, we are seeing increased premiumization and personalization. Examples include meal plans, DNA or microbiome- based customization (e.g. dog health food brand Pooch & Mutt’s acquisition of BIOME9, which produces dog gut health test kits), and functional nutrition focused on specific need states such as joint health and anxiety management.
Pet tech is an attractive segment
Following the human obsession with data and analytics, we see the pet tech and data space as a hot area of interest for many investors going forward. The spectrum of businesses here is broad, ranging from smart feeders and automated litter boxes, to pet cameras, GPS trackers and data analytics on pet behavior.
Additionally, we expect to see increased interest – and growth – in pet services (e.g. grooming salons, daycare services, training franchises, pet travel services) and pet-friendly hospitality and leisure experiences (e.g. pet hotels, dog adventure parks).
Many of these segments are still very fragmented regionally and so remain ripe for consolidation, offering a range of value creation opportunities for investors.
Other emerging themes
Investors in the pet space are spending time on a number of other themes and considerations, some of which cut across those outlined above. However, the themes and/or investment propositions are less well developed at this stage.
One example is environmental, social and governance (ESG) in the context of sustainability in pet nutrition, e.g. insect protein and cultured meat for pet food, or fully plant-based options. We expect these areas may drive some deal volume as these technologies mature and consumer acceptance increases.
Positive outlook for the future
The M&A outlook is strong for the pet industry in Europe for 2026 and beyond. The conditions that have supported elevated levels of pet M&A in 2025 are expected to continue into next year: stabilizing interest rates, abundant PE capital and a strategic focus on acquisitions to support accelerated growth.
There is a buoyant pipeline to support continued investor activity that includes potential initial public offerings (IPOs), acquisitions by larger PE funds and corporate carve-outs or divestitures.
Market fundamentals in the pet space – crucially resilience – will likely remain relatively more attractive than many other consumer segments. While the past 5 years have taught us that we never know which ‘black swan’ may be around the corner, there is broad consensus that the volume and value of pet deals should continue to grow.
Fonte: globalpetindustry.com
