Swedencare is a high-growth, M&A-driven animal health company that develops, promotes and produces products mainly within Dematology, Neutraceuticals and Odontology for Pets, both under its multi-brand umbrella but also as a CDMO. Through an active M&A agenda, the company has gone from 2019 sales of SEK 127m to a PF Q3’21 LTM sales of SEK 1.6bn in two years, with an EBITDA margin of 29%. The products are sold globally, but after the M&A, the company is mainly active in the US, with >80% of PF sales coming from the region.
Having increased its size by roughly tenfold in two years through acquisitions, we see potential risks related to integration and extracting synergies. Furthermore, with the animal health space consolidating quickly, the sector is attracting increasing interest from financial and strategic buyers, pushing up M&A multiples. Being one of the consolidators, this risk also affects Swedencare if multiples continue to rise.