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.
© 2020 Private Equity Professional | April 7, 2020
Tengram Capital Partners has closed its buy of the hair care and skin cleansing business of High Ridge Brands, a portfolio company of Clayton, Dubilier & Rice.
“We are excited to be closed on this transaction and focused on running our business with Tengram Capital,” said James Daniels, president and CEO of High Ridge. Mr. Daniels was High Ridge’s CEO from 2011 to 2017 and he now returns to the company in partnership with Tengram. “While we are in unprecedented times, our strategy is clear and focused. We plan to reinvest in our team, strengthen the relationships across our supply chain, and ensure that customer service is once again priority one. Further, as the country unites to fight the Coronavirus, we plan to step up and do our part as well. This means ensuring that our supply chains remain efficient and our soap products specifically are getting into the hands of consumers and those medical providers on the front lines.”
“The closing of the acquisition of High Ridge’s hair care and skin cleansing brands begins a new chapter for the company; zero debt, cash on the balance sheet, along with unlevered working capital provides the ammunition to re-establish its market position and pursue large scale growth opportunities,” said William Sweedler, co-founder and managing partner at Tengram. “Despite greater global economic uncertainty today, our brands are core to our customers and thus well-positioned to build momentum as we invest in product development and marketing, re-establishing High Ridge Brands as a leader in the consumer space.”
New York City and London-based 
Insight Partners has held a final hard cap closing of Insight Partners XI LP at $9.5 billion. The firm’s earlier fund closed with $6.3 billion of capital commitments in 2018.
“First and foremost, we want to acknowledge the current climate and the hardships being felt across the globe,” said Jeff Horing, the founder and managing director of Insight. “We are thankful and humbled by the support of our investors which enables us to continue to deliver world-class resources during turbulent economic times. Fund XI gives us continued flexibility to provide a combination of capital and operating support that suits the different needs of every software company in a dynamic world.”
“Since our first investment 25 years ago, the global software ecosystem has matured even as it continues to innovate, spurring Insight’s own innovation in sourcing, and our data-driven partnership approach to working with scaleup companies as a minority or buyout investor,” said Deven Parekh, a managing director at Insight. “We are grateful that through economic cycles and unprecedented circumstances, Insight Partners remains a sought-after institutional platform for supporting next-generation software companies.”
Platte River Equity has hired Brian Klaban as the firm’s new Director of Business Development and Debt Capital Markets. Mr. Klaban will lead Platte River’s sourcing, marketing and business development efforts and support the firm’s debt financing activities.
“I’m excited to join the Platte River team and contribute to their continued success investing in and building market-leading businesses,” said Mr. Klaban. “The firm’s unique background provides a compelling value proposition to investors, founders and management teams, and I look forward to helping build successful future partnerships.”
