Vet Industry Deep Dive Pt.3

We’ve spent the past two instalments of this deep dive (Part One, Part Two) delving into the veterinary clinic consolidation landscape, and now we’re turning to a closely related, fast-rising adjacency: pet boarding and grooming. To get an insider’s view on this market, we spoke with Eyal Cohen - CDO & Co-Founder at Pet Resort Hospitality Group - about his transition from veterinary clinic consolidation to pet boarding rollups.

Listen to the full podcast interview with Eyal on Spotify.

Introduction

The pet boarding/daycare and grooming sector has undergone a remarkable evolution over the past decade, emerging from a cottage industry of small, independent operators into a more structured, investor-fueled market. This article examines the rising consolidation in the space, charting the rise of national brands, franchise networks, and private equity roll-up platforms in the United States and beyond. We also present key valuation and margin metrics that reveal why this adjacency to the larger pet care space (especially veterinary) holds such appeal for M&A professionals.

Key Themes

• The scale of fragmentation and why the industry attracted so much capital.

• How transaction multiples have shifted over the last decade.

• The margin structures in boarding vs. grooming.

• How savvy operators achieve profitability.

1. Fragmented Market and the Rise of Consolidation

Industry at a Glance (2015):

• Ten years ago, the U.S. market was virtually all local, owner-operated pet boarding kennels, doggy daycares, and grooming salons.

• Estimates count 6000-7000 boarding kennels in the US at this time.

• Franchise concepts like Camp Bow Wow or Dogtopia were known, but still niche.

• In Europe and Canada, the picture was even more fragmented.

Accelerated Growth (2015–2022):

• Rising disposable incomes, surging pet ownership, and the “fur baby” cultural shift for the humanisation of pets spurred consumer spending on more specialised, premium pet services.

• Investors recognised the parallels to veterinary consolidation - a high-growth, resilient vertical - and jumped into grooming and boarding.

• Franchise systems (Dogtopia, Camp Bow Wow) sold new locations at a record pace.

• Corporate-backed consolidators (Destination Pet, NVA Pet Resorts, Pet Paradise) began acquiring multiple facilities to grow regionally.

• High veterinary multiples and a growing regulatory concern around consolidation of pet hospitals spurred some players (JAB / NVA) to grow further into the pet boarding space.

• COVID-19 served as an inflection point: although 2020 lockdowns hurt boarding/daycare temporarily, the pandemic overall led to an even bigger surge in pet ownership (more than 23 million American households adopted a pet during the pandemic). Once travel resumed, many pet owners turned to well-resourced daycare/boarding providers, increasing brand recognition.

Status by 2025:

• The 5–10 largest brands (led by Dogtopia, Camp Bow Wow, etc.) still control less than 10% of the market combined. This indicates a consolidation level less than half of that in the veterinary clinic sector.

• Nevertheless, the presence of large, multi-unit operators is far more visible than a decade ago. In major metro areas, consumers often have a choice between local independents and multiple national chain options.

2025 market share (total market ~9000 boarding kennels) - largest players:

2. Valuations & Transaction Multiples

Single-Unit vs. Multi-Unit Deals

• Owner-Operated Facilities typically trade at 2–4× cash flow (~0.6–1.1× revenue). Grooming shops trend lower than boarding/daycare due to heavier reliance on a single groomer’s labor and clientele, and lower margins.

• Regional Chains or Franchisors command significantly higher multiples (8–12× EBITDA, sometimes low teens if the brand is fast-growing).

• During the pandemic boom (2020–2022), some transactions soared to 15× EBITDA and above - mainly in large platform deals.

Key Drivers of Multiples

• Growth Potential: Ability to add more locations or integrate additional services (training, retail) can justify higher valuations.

• Brand Strength: Franchisors with recognised national brands command premium pricing.

• Operational Track Record: Investors pay up for proven, profitable resort chains with robust tech (online reservations, cameras, membership apps).

3. Economics & Margins