Pet Sector M&A Update – October 2025

Pet Sector M&A Update – October 2025

Fundamental Growth Drivers in the Pet Sector Remain Strong, M&A Muted as Tariffs Cloud Near-Term Earnings Forecasts

he Pet sector has continued to experience a tame Merger and Acquisition (M&A) market through year-to-date (YTD) 2025 as tariff fluidity has created significant uncertainty for business owners and acquirers. These fickle tariff policies have impacted key supply chain partner countries for pet operators, driving near-term unpredictability for margins, retailer placement, and consumer shopping behavior. However, fundamental growth drivers, such as pet humanization and favorable demographic trends, have contributed to consistent spending growth and an optimistic mid- to long-term Pet sector outlook. Included in this article is a recent interview Capstone conducted with Frontenac Managing Partner, Walter Florence, to discuss operating and scaling pet services businesses, as well as plans for the firm’s newest Pet sector platform, Digs Dog Care (DIGs).

Despite a slower pace of transactions, investor appetite for the Pet sector continues to be very strong with Capstone receiving inbound calls on a weekly basis from groups looking to enter or expand in the space.

Tom ElliottManaging Director, Capstone Partners

Humanization, Demographic Tailwinds Reassure Continued Pet Sector Expansion

Pet humanization trends and demographic tailwinds have continued to prop up spending in the Pet sector. Premiumization has remained present as pet owners have increasingly opted for higher-quality goods and services that mirror their own consumption habits. Additionally, younger consumers have displayed a higher propensity to spend on their animal companions. Generation Z (aged 13 to 28) reported spending $6,103 on average annually, according to The Harris Poll.¹ Millennials (aged 29 to 44) followed with $5,150 in average annual spending, trailing the top spending age group by $953. The two older generations lagged Gen Z materially, with Gen X (aged 45 to 60) averaging $3,878 in annual pet spend and Boomers (aged 61 to 79) averaging $2,454. Sector demand is expected to structurally expand due to the younger generation’s willingness to spend, buoying customer lifetime value across the space. Pet sector expenditures have reflected these tailwinds and continued to climb following the COVID-related spike in pet ownership, though growth has normalized from peak levels in 2021. Total U.S. pet spending increased 3.3% year-over-year (YOY) in 2024 and is anticipated to increase 3.4% YOY to $157 billion in 2025, demonstrating steady market expansion, according to the American Pet Products Association.²

Tariffs Muddy 2026 Outlook for Pet Products, Emphasize Product Placement and Pricing

Reciprocal tariffs introduced by the current administration on April 2 have greatly impacted the Pet sector outlook for 2026, as it has across many other Consumer markets. The sector’s reliance on Asia for raw materials and ingredients, as well as Canada and Mexico for finished goods and manufacturing, will likely pressure margins for business owners across Pet segments. Constant adjustments to implementation dates and duty rates have left operators and retailers uncertain regarding price hikes and product placement in the coming year. Consumers have already expressed uneasiness over tariff pass-through attempts, with the majority (52%) of pet parents reporting concern that tariffs will further increase the cost of pet ownership, according to Rover’s 2025 True Cost of Pet Parenthood Report.³ These concerns have pushed retailers to focus on limiting brand price hikes, reinforcing value-led placement criteria, prioritizing higher-productivity stock keeping units (SKUs), and leveraging bundled services like grooming, veterinary, and pharmacy programs to capture wallet share. Capstone expects clarity around tariffs and the 2026 Retail landscape to relieve some pressure on Pet sector dealmaking and foster a healthier M&A market.

Pet Sector M&A Continues to Soften, Strategic and Private Equity Buyer Sentiment Points to Rebound in 2026

Pet sector M&A has softened through YTD, falling 37.3% YOY to 42 transactions announced or completed. Muted dealmaking has been primarily driven by tariff-induced seller hesitancy—a trend Capstone heard echoed while attending SuperZoo in August 2025. During the conference, many operators displayed material demand for going to market but expressed significant concern on timing. However, the Food and Products segments have experienced upticks in M&A activity. Food segment deals have increased to 10 transactions YTD, rising by three deals YOY. Growing popularity for freeze-dried and human-grade food formats have continued to drive M&A in the segment as businesses look to build capacity and expand product suites around premium offerings with super-food ingredients. Of note, Glacial Freeze Dry acquired Foodynamics, a manufacturer of private label freeze-dried human-grade whole foods for dogs and cats, in August 2025 for an undisclosed sum. Meanwhile, humanization trends have also supported Pet Products segment M&A with businesses offering animal health goods such as supplements, paw care tools, and other wellness products piquing acquirer interest. M&A in the Products segment has risen by one deal YOY to 10 transactions. Sector M&A pricing has improved despite waning deal volume as buyers have increasingly focused on high-quality targets. Recurring revenue, operational efficiency, margin stability, and customer loyalty have drawn premium valuations to date. Pet sector M&A EBITDA multiples have averaged 14.5x between 2022 and YTD, more than a turn higher than the 2018-2021 period average of 13.4x, demonstrating a persistent appetite from strategic and private equity (PE) buyers following the COVID-related jump in pet ownership.

Strategic buyers have continued to comprise the majority (69%) of Pet sector dealmaking, though both strategics and PE firms have pulled back from the M&A market. Strategic activity has declined by five deals YOY to 29 transactions in YTD 2025. Private strategic buyers have accounted for four fewer deals while public strategic transactions have dropped by just one deal YOY. Bid-ask spreads have remained a hurdle to strategic dealmaking, partially attributable to PE-backed assets and businesses acquired during the pandemic at elevated multiples boosting seller valuation expectations. Macroeconomic uncertainty has also constrained strategic acquisition activity to date, but sentiment has appeared to improve. “We continue to view M&A as a strategic lever to complement our internal innovation agenda and drive long-term shareholder value…We plan to accelerate our M&A efforts in 2026 as conditions continue to become more favorable,” noted Nicholas Lahanas, CEO of Central Garden & Pet (Nasdaq:CENT), in its fiscal Q3 2025 earnings call.⁴ PE activity has registered a steeper decline, falling to 13 transactions in YTD 2025 compared to 33 in YTD 2024. The more pronounced drop in sponsor acquisitions is primarily due to add-on activity, which has declined to 10 deals from 28 in the prior year period. Financial sponsors have comprised 31% of total sector transaction volume YTD, nearly 20% lower than YTD 2024 (49.3%) and well below the 2018-2024 period (39.7%). PE dealmaking is slated to rise as business owners gain clarity on 2026 financial performance projections, seller commitment improves, and more transactions come to market.

High-Quality Pet Businesses Continue to Transact Across the Sector, Capstone Remains Active in the Pet and Vet Products Segments

Despite tepid deal volume, best-in-class pet businesses have continued to garner acquisition appetite. Pet and vet products, snack, and services businesses have seen competitive sale processes with both strategic and financial buyers actively seeking complementary product portfolios, footprint expansion, or new platforms in the space. Capstone has witnessed demand for pet and vet products companies first-hand, advising on three transactions between 2024 and YTD: AllAccem’s acquisition by Vimian Group (OM:VIMIAN), CP Medical’s acquisition by Riverpoint Medical, and Ultra Pet’s acquisition by Oil-Dri Corporation of America (NYSE:ODC). Select transactions underscoring the diverse acquisition appetite in the Pet sector are outlined below.

• Firelight Capital Partners Acquires Snif-Snax (August 2025, Undisclosed) – In August 2025, lower middle market PE firm Firelight Capital Partners acquired Snif-Snax for an undisclosed sum. Snif-Snax produces single-ingredient, all natural pet snacks, excluding grains, chemical additives, antibiotics, and genetically modified organisms. The company offers smoked Scottish salmon and chicken treats, manufactured in human-grade food facilities and smoked using natural hardwood chips. Additional add-on transactions are anticipated to support Snif-Snax’s growth under Firelight Capital’s management. “We believe this is the beginning of an amazing journey, and we look forward to fast-tracking our growth organically and through strategic acquisitions. We are excited to build upon the strong foundation Jonathan [Snif-Snax founder] has developed, and together with the upcoming product innovation, improved category management, and future branding/packaging opportunities, Snif-Snax is positioned to be the leader in high quality pet treats,” commented Kevin Frick, Snif-Snax’s newly appointed CEO, in a press release.⁵
• Dogs 24/7 Acquires Pampered Paw Resort (March 2025, Undisclosed) – Dogs 24/7 acquired Pennsylvania-based Pampered Paw Resort in March 2025 (undisclosed). Dogs 24/7, based in Arizona, offers 24-hour cage free dog boarding and daycare under its Learning Pawsibilities, Lazy Dog Crazy Dog, Zoomies, and Washpa brands. The company employs ~200 employees across 10 locations, according to a press release.⁶ The acquisition represents Dogs 24/7’s expansion into its fourth U.S. state and first installment on the East coast. “In the coming months, we are excited to bring our 24/7 cage-free model to Pampered Paw Resort, while maintaining traditional enclosures for dog parents who feel more comfortable with that option,” noted Stephen Biles, Founder and CEO of Dogs 24/7, in the press release.
• Creative Science Acquires Infiniti Medical (March 2025, Undisclosed) – CIMA Animal Health subsidiary, Creative Science, acquired Infiniti Medical and its subsidiary Orthomed UK for an undisclosed amount (March 2025). Creative Science distributes animal health products for veterinarians, pet owners, and producers. Infiniti Medical designs and manufactures medical devices for the Veterinary market. Its product portfolio includes a virtual reality surgical training device, neurology instruments, pedicle screws, surgical staplers, ureteral stents, glue wires, and accessories for pet care. “The acquisition represents an exciting opportunity to expand our impact on veterinary medicine. Infiniti Medical and Orthomed are trailblazers in their respective fields, and by joining forces, we can accelerate innovation and provide even greater value to veterinary professionals worldwide,” said Lynn Snodgrass, CEO of CIMA Animal Health, in a press release.⁷

Capstone Speaks with Frontenac on the Pet Services Investment Landscape and its Portfolio Company, Digs Dog Care

Walter Florence, Managing Partner
In September, Capstone spoke with Walter Florence, Managing Partner at middle market PE group Frontenac, to discuss the Pet Services landscape and their 2024 investment in DIGs. Mr. Florence focuses on sourcing new investment opportunities and working with portfolio companies. He also serves on Frontenac’s Investment Committee and leads the firm’s Management Committee. Throughout his career, he has led investments in a variety of industries, including Consumer Products & Services, where he is currently focused. Mr. Florence is a Director at DIGs and other Frontenac portfolio companies.

Frontenac focuses its investments on the Consumer, Industrial, and Services industries. In Consumer, the firm targets investments in: Branded, Contract Manufacturing & Private Label Food Manufacturing; Food Ingredients; Food Safety & Sustainability; Pet Consumables & Services; Nutrition, Health & Wellness; Residential & Consumer Services; Distribution & Supply Chain Services; and Service-Oriented Franchisors or Franchisees. Frontenac looks to take controlling ownership in North America-based businesses via $50 to $150 million equity investments and buyouts, targeting operators with $5 to $40 million in EBITDA. To learn more about Frontenac, their investment approach, and current and prior portfolio companies, visit frontenac.com.

How did Frontenac differentiate itself from other middle market private equity firms regarding its approach to partnering with DIGs? Was it a competitive process?

Frontenac’s approach is executive-led and thesis-driven. We call it CEO1ST®. Great leaders build great teams. Great teams build great businesses. At Frontenac, our differentiation stems from our CEO1ST® program. We bring talent together with opportunity.

In the case of DIGs, we partnered early with Todd and Greg Siwack, Chairmen, and Jeff Nathan, CEO. Each is an experienced leader with deep Consumer industry experience, including the Pet sector. From day one, we had a shared vision to elevate the experience for our pets, our people, and pet parents. We saw the same opportunity to be an early consolidator in an attractive market that is large ($16 billion+), fragmented (~96% independent operators), and growing (due to demographic and behavioral shifts). As for competition, we would like to think our experience, our ability to move quickly, align culturally, and to articulate a differentiated platform vision—grounded in data and long-term value creation—resonated with the DIGs team.

What are some of the key levers or strategies you plan to employ when scaling companies that operate in the Pet Services sector specifically? Do you want to build a national or regional brand?

The opportunity we see at DIGs is to build an industry leading pet care consolidator that, at scale, is unified under one national brand. The other important levers are (i) enhancing customer experience through digital tools—booking, updates, loyalty programs, (ii) investing in frontline teams through training and ownership opportunities, and (iii) a focus on acquisitions in strategic markets with strong demographics and pet ownership density. The goal is not just scale—it’s consistency, trust, and a premium experience that pet parents recognize.

Does the DIGs strategy involve rebranding acquired resorts or will you keep legacy names? What are your ideas around green field locations vs. renovation on acquired resorts?

DIGs is an acquisition-led strategy. Renovation is and will be a component of our mix. We have not yet decided about green field units. With regard to rebranding, we are ultimately building a national brand, but with best practices across locations while preserving the local equity and personality that may come with some targets.

How have you seen consumers react to the recent macroeconomic volatility? How do you feel operators in the Pet Boarding/Daycare space are positioned to deal with any headwinds related to consumer spending pressure?

Pet services have proven remarkably resilient. Even amid inflationary pressure, pet parents continue to prioritize care, safety, and enrichment for their animals. What we’ve seen is a shift toward value-for-quality—not trading down, but seeking transparency and consistency.

Operators who deliver trust, convenience, and premium experiences are well-positioned. Pricing power is intact, but operators must be more strategic—leveraging data, bundling services, and optimizing staffing to maintain margins.

Have you seen a jump in dog daycare numbers amid the return-to-work push that seems to be going on in a lot of industries?

Yes. We think it is more of a shift and not just a bump. Working families are looking for reliable, enriching care for their dogs.

At Captone, we have observed a growing number of PE participants in the Pet Services sector. Has DIGs had to pay higher valuation multiples for its more recent acquisitions as a result?

This is a very large and very fragmented market. The team at DIGs has earned a reputation as a preferred buyer—sellers trust our team, our culture, and our track record. They offer sellers speed, certainty, and a long-term vision. They offer employees continued investment in operational support, training, and employee ownership. They are not chasing deals—they are building a platform.

Demographic and humanization trends have remained key drivers of growth and optimism in the Pet sector despite near-term headwinds, namely the shifting trade landscape and macroeconomic instability. While these headwinds have pressured Pet sector M&A in YTD 2025, both PE and strategic appetite on the buy- and sell-side are expected to regain momentum. Clarity on 2026 financial performance and retailer placement, as well as the continued opportunity for consolidation in key Services segment niches, will likely assuage acquisition tepidness and bring a more vibrant M&A market in the new year.

To discuss the Pet Retail landscape moving into 2026, pet services acquisition appetite, provide an update on your business, or learn about Capstone’s wide range of advisory services and Pet sector knowledge, please contact us.

Andrew Woolston, Associate, was the lead Market Intelligence contributor to this article.

Fonte: capstonepartners.com