Happy Monday. Here’s what we’ve got today…

• A look at Shore Capital Partners’ veterinary combination

• Plus, Avenue Capital Group looks to sell impact investing business

Preparing for the next leg of veterinary growth:

Shore Capital Partners and Silver Lake are in talks over a possible $8.6 billion combination of two Shore veterinary platforms.

The proposed merger would combine Shore portfolio companies Southern Veterinary Partners (420+ locations) with Mission Veterinary Partners (330+ clinics) and recapitalize the combined entity with $4 billion in new equity from the sponsors, plus around $3 billion in secured debt and preferred equity.

If the deal goes through, the combined business would be one of the largest veterinary providers in the U.S., reaching a scale comparable to Mars Inc.'s 2,000-practice Banfield/VCA and JAB Holdings' 1,000-hospital National Veterinary Associates.

Shore acquired a three-hospital Southern Veterinary Partners in 2014 as the first purchase out of its $113 million debut fund. At the time, managing partner Justin Ishbia outlined a thesis around rapid high-volume add-ons of small practices with EBITDA of between $1 to $5 million, which he believed could be done at multiples between 4 to 6 times.

In 2017, the firm separately formed Mission Veterinary Partners through the merger of two recently acquired practices. Shore later tested the market for Mission in 2021 with a pro forma adjusted EBITDA of around $160 million, which included contribution from its pipeline of add-ons under LOI.

Shore opted to extend its hold after valuation expectations weren’t met, in part because of buyer reluctance to give full credit to the pro forma adjustments (the core business’ EBITDA was thought to be closer to $100 to $120 million).

For Silver Lake, the deal would be the firm’s second veterinary holding, following its €3.5 billion joint investment with Nestlé into EQT-owned IVC Evidensia, Europe's largest veterinary group.

That deal shared some similarities with the current proposal: Silver Lake put cash into a strong asset while providing optionality to the existing sponsor—EQT sold the stake held by its 2015 vintage fifth fund and bought back in through its ninth fund.

If Shore and Silver Lake do reach an agreement, antitrust might prove the bigger hurdle. On top of its increased healthcare private equity scrutiny, the FTC has already taken a dim view of veterinary consolidation.

In 2022, JAB entered into a consent decree with the FTC requiring it to seek prior approval before purchasing any clinics within 25 miles of an existing California or Texas location for the next decade. In written comments, Chair Lina Khan expressed concern over the potential for a stealth monopoly built from small add-ons—uncomfortably close to the Shore playbook.

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• ATL Partners is exploring the sale of Global Critical Logistics, a live entertainment logistics provider.

• Renovus Capital Partners invested in Performive, a provider of managed IT services.

• Blackstone is in advanced talks to acquire shopping center owner Retail Opportunity Investments Corp., which could be valued at around $3.4 billion.

• Aero Accessories & Repair, a portfolio company of ATL Partners, acquired Buffalo, New York-based Aero Instruments and Avionics, a provider of testing and MRO services for airlines.

• Littlejohn & Co. acquired Sunbelt Modular, a designer and manufacturer of modular building products.

• Carlyle Group sold its majority stake in Tunisia-focused oil and gas producer Mazarine Energy to the company's CEO, Edward van Kersbergen.

• Corus Entertainment, a Canadian media group with 37 radio stations and 32 TV channels, has hired Jefferies to explore a potential sale, per Bloomberg.

• Antenna Group is in talks to acquire Time magazine from Salesforce co-founder Marc Benioff for around $150 million, per CNBC.

• ECI Partners invested in CMap, a professional services automation software provider for architecture, engineering, and consulting clients.

• Anglo American agreed to sell its 33.3 percent stake in Jellinbah Group, an Australian steelmaking coal joint venture, to Zashvin for A$1.6 billion.

• Wellpath Holdings, a H.I.G. Capital-owned provider of healthcare services to prisons and jails, is preparing to file for bankruptcy after defaulting on its credit facility.

• Monomoy Capital Partners acquired Oliver Packaging and Equipment, a Michigan-based manufacturer of food packaging systems and bakery equipment.

Tech, Vertical SaaS, & Misc. Enterprise

• Physical Intelligence, a startup developing universal AI control software for robots, raised $400 million in new funding co-led by Thrive Capital and Lux Capital, with participation from OpenAI, Redpoint Ventures, and Bond.

• Plato, a Berlin-based ERP for wholesale distributors, raised $6.5 million in pre-seed funding led by Cherry Ventures.

Fintech

• fundcraft, a digital fund operations platform, raised €6 million in Series A funding co-led by 3VC and MiddleGame Ventures.

Industrials, Greentech, & Other

• BETA Technologies, a Vermont-based electric aircraft manufacturer, raised $318 million in Series C funding led by Qatar Investment Authority, with participation from Fidelity Management & Research Company, TPG Rise Climate, and United Therapeutics.

• Avenue Capital Group is considering a sale of its impact investing business after the New York State Common Retirement Fund declined to participate in its second Sustainable Solutions Fund.

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