IVC flotation plans in flux due to CMA investigation

The outcome from business regulators’ examination of the veterinary sector could influence future flotation plans for a major care provider, its boss has hinted.

IVC Evidensia has stressed it is not actively pursuing the option currently, despite claims a public listing could take place once the ongoing Competition and Markets Authority (CMA) investigation is completed.

However, a prominent property analyst believes the whole sector now “stands at a crossroads” as it awaits details of the authority’s reform proposals.

A provisional decision on remedies is now expected next month, following the move to extend the CMA investigation beyond its originally anticipated completion date in November.

‘Practical solutions’

But in an interview with The Times, IVC chief executive Simon Smith indicated the results of that process could determine whether such a listing occurs in London or elsewhere.

He said: “There’s lots of sensible business and management reasons to list in the UK, but there has to be an environment which is conducive to investment and business growth.”

His comments follow considerable unease within the sector at the range of potential reform options identified in a working paper published at the start of May.

Mr Smith argued the extension was “probably good time well spent to come up with practical solutions” and claimed new guidance from the authority indicated a recognition that its decisions could directly affect companies’ future investment plans.

But he added: “It remains to be seen whether the remedies that are put in place are sufficiently clear that they are finite and aren’t then varied over and over again.”

Share prices hit

Share prices in the two veterinary groups that are already listed on the London stock markets have yet to recover much of the ground lost during the current CMA process.

As of 5 August, CVS Group shares were trading nearly 42 per cent lower than they were prior to the authority launching its initial review in September 2023, though the price has rallied in recent months.

Shares in Pets at Home, which incorporates Vets for Pets, have also fallen by around 40 per cent over the same period, though some business analysts argued they are undervalued at their present level.

Reports suggest IVC could seek to float in two years’ time, through an initial public offering that would make its shares available on the open market for the first time, now that the CMA investigation is due to be completed next May.

When asked if that was a fair representation of the current position, the company said it had nothing further to add to Mr Smith’s comments “except to say we’re not actively pursuing anything at the moment”.

‘At a crossroads’

The company was valued at more than £10 billion when it considered going public in 2021 and market observers believe its floatation would be one of the biggest in The City for many years – if it happens.

But as it released its latest analysis, property consultancy firm Rapleys argued there was likely to be a “rebalancing” of the sector following the CMA probe.

Partner Simon Harbour said: “The UK veterinary sector stands at a crossroads, balancing rapid growth and evolving regulation. 

“While CMA scrutiny may slow consolidation, it also paves the way for independents to flourish, supported by innovation and adaptive property reuse.

“The humanisation of pets continues to drive demand for advanced care, positioning the sector as a resilient and dynamic alternative asset class.”