Animal health company Rarebreed Veterinary Partners of Portland said Wednesday it has purchased a majority share of Maine Veterinary Medical Center of Scarborough, the largest specialty veterinary practice in Maine and northern New England.
The investment is part of Rarebreed’s move to triple the number of veterinary practices it owns to at least 30 by the end of this year.
Rarebreed buys a majority stake in veterinary businesses and lets employees own the remainder. The practices in turn get access to Rarebreed’s large network, giving them better buying power for pharmaceuticals and better health benefits for their employees, said Dan Espinal, CEO and co-founder of Rarebreed.
The company said in February that it had raised $42 million in two rounds of equity financing that included investments by Caremi Partners and Northwood Ventures.
The purchase of Maine Veterinary Medical Center closed on Feb. 28 for an unspecified amount.
Espinal said the field of veterinary medicine is expanding rapidly as consumers look for the same kinds of medical benefits for their pets as they have for themselves. With the specialty hospital purchase, Rarebreed can offer broad services under one roof, he said.
“Veterinarians are being taught to refer animal patients to a specialist if they can’t tell what is going on. The specialty area of veterinary medicine is growing quickly,” he said. A big part of that growth is medical insurance for pets.
Animal health businesses have been growing rapidly. In 2019, Americans spent close to $19 billion on veterinary care, up about 5 percent over 2018 spending, according to the American Pet Products Association.
For its part, Maine Veterinary Medical Center was turning a corner. Dr. Alan Potthoff, who founded the center in 2007 and is its majority owner, is retiring. The center met with multiple potential partners before the agreement with Rarebreed.
“A primary reason for selecting Rarebreed is their commitment to preserve local control and offering equity to interested doctors and staff,” said Dr. Ezra Steinberg, chief of staff at the center. “The ownership aspect of this agreement is really exciting because it means that our staff will get to participate in the economic upside of the business – including equity and profit-sharing.”
Steinberg said owners and their pets also benefit because the practice will remain intact and staff will be happy.
“Corporate owners often come in and cut staff and make changes so that staff flee,” he said.
Since it was founded in 2018, Rarebreed has grown to 450 employees and has $40 million in revenue. This is the 11th practice in Rarebreed’s network, with nine of them in Maine.
The company plans to buy nine more practices in the next three months, half of them in Maine. By the end of 2020, it plans to have a total of 30 to 35 practices and employ about 700 across those operations.
That center includes a 20,000-square-foot hospital with advanced medical care for pets, including neurology, internal medicine, oncology, ophthalmology, surgery, rehabilitation and emergency and critical care. It also has Maine’s only veterinary MRI and fluoroscopy suite.
The center employs 150 veterinary professionals, including 21 specialty doctors. Those doctors and some staff will own part of the company.