Sell Your Dog Daycare: A Perfect Time to Unleash Maximum Value

Is your dog daycare thriving, and you're wondering what it's worth or if it's time to sell? You're not alone. The pet care industry is booming, driven by a surge in pet ownership and a growing focus on pet wellness. This translates to excellent news for dog daycare owners considering an exit or seeking resources to support opening additional locations.

Market Update: A Seller's Paradise for Dog Daycares

The demand for high-quality dog daycares is at an all-time high. Pet parents are increasingly seeking safe, stimulating, and social environments for their furry companions. This strong demand translates to premium valuations for dog daycare businesses.

Here's what's driving the market:

• Rising pet ownership: A growing number of people are welcoming pets into their homes, creating a larger customer base for dog daycares. Dog daycares cater to the growing trend of pet parents prioritizing their pets' physical and mental well-being. According to the American Pet Products Association, there was a 4.7% growth in American pet ownership from 2009-2019. In comparison, that growth rate more than doubled to 9.77% growth in American pet ownership from 2020-2022.
• Increased disposable income: Pet owners are spending more on their pets' health and happiness, including daycare services. In 2013, pet expenditures were $57.8 billion. By the end of 2021, this figure had climbed to $102.8 billion, an increase of 77.9 percent in just 8 years (U.S. Bureau of Labor Statistics). In 2022, Americans spent $136.8 billion on their pets (Forbes).
• Return to the office: Increasingly, companies are requiring employees return to the office, causing a demand in dog daycare services. 90% of companies plan to implement return-to-office policies by the end of 2024, according to an August report from Resume Builder.
• Favorable economics: Recurring revenue and low costs to operate give dog daycare owners great leverage in negotiating top offers from private equity-supported buyers. 

Unlocking the Value of Your Dog Daycare

So, how do you know if it's the right time to sell your dog daycare? Besides your personal and financial goals, or even your desire to grow your business further, here are some signs:

• Strong financial performance: A history of consistent revenue growth and profitability makes your daycare more attractive to buyers.
• Loyal customer base: A strong reputation and repeat clientele demonstrate the value of your business. Population trends in geographic areas are also a key driver in offers. 
• Experienced and passionate team: A dedicated staff ensures a smooth transition for both you and the new owners.
• Growth potential: Does your daycare have room for expansion, either through additional services or locations?

Why Now is the Perfect Time to Sell

The current market offers several advantages for dog daycare owners looking to sell:

• Premium valuations: Multiple buyers competing for your business drives up the sale price. Buyers value daycares by taking EBITDA - Earning Before Interest Taxes Depreciation and Amortization (an indication of profitability) and assigning it a multiple to provide their purchase price. We are seeing current EBITDA multiples in the 4-8x range currently. To reiterate multiples in this space are driven by a number of factors including size of the business, number of locations, potential for growth, and your post-sale role. 
• Fast transaction times: High buyer interest can lead to a quick and efficient sales process. We are seeing acquisitions happen over 90-120 days. 
• Multiple exit options: Strategic buyers and private equity firms offer a range of offers to suit your goals. Whether you want to stay on or have a plan to exit soon, buyers can work with you on your post-sale role. Additionally, there are lucrative offer structures which will further grow your equity in the business and in the buyer's larger platform. 

Beyond the Numbers: Considerations for Dog Daycare Owners

Selling your dog daycare is a significant decision. Here are some key factors to consider:

• Your future plans: Do you want to retire, or are you open to staying on in some capacity?
• Strategic fit: Choose a buyer who shares your values and vision for the daycare's future.  
• Maintaining your legacy: Ensure the buyer understands your company culture and commitment to pet care in the community you serve. 

Partnering with a Dog Daycare M&A Advisor like Evergreen M&A

The dog daycare M&A landscape requires specialized expertise. An experienced advisor can:

• Maximize your sale value: Our negotiation skills ensure you get the best possible price. We'll provide you an EBITDA multiple valuation range to set your expectations and it will also give us a strong position to negotiate from. Signing a letter of intent with a buyer is just the beginning - there are multiple stages of the deal where negotiations can happen. 
• Find the right buyer: We leverage our network to identify strategic or financial buyers aligned with your goals. We'll find 5-6 serious buyers to engage, shortening the stress and timeline to execute your sale. 
• Navigate the process: From valuation to closing, we'll guide you through each step and manage the entire process to make sure the close is successful and your stress is reduced. 
• Minimize risks: We are able to anticipate potential issues and ensure a smooth transaction. Anything can happen during the course of an acquisition, and it's our job to ensure a successful close with a process that exceeds your expectations. 

Ready to Unleash the Value of Your Dog Daycare?

The pet care industry is booming, and dog daycares are at the forefront. Partnering with a dog daycare M&A advisor can help you achieve a successful outcome and reward your hard work.

We invite you to schedule an introductory conversation with our President, Gary Behler. You can book a convenient time on Gary's calendar here, or complete the form below and we'll be in touch. 

SCHEDULE A CALL WITH GARY BEHLER