Nov 19, 2020

Vets IPO likely to test the market’s animal spirits

Private equity group EQT and Nestlé, IVC's current owners, are planning a London listing for early next year. Analysis from RBC Capital Markets found that between 2009 and 2017 CVS bought £26.1m of ebitda by taking over 255 practices, yet group ebitda rose by just £29.7m. While not much is known yet about IVC's finances, a Fitch report from August hints at a roll-up vehicle that is running out of road. The debt ratings agency expects sales to grow just 5 per cent by 2024 and records negative free cashflow for 2019 as net debt ballooned to 9 times ebitda, likely choking the bid pipeline. Revenues at GLS, the overseas parcel delivery business which now brings in a third of the group total, rose a fifth. Most parcel sorting is manual and each percentage point increase in domestic parcel revenue costs about £8m, the group says. The group is unlikely to shuck off its constricting statutory obligations to deliver to the door any time soon.

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