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How investors are helping shape animal clinics

Investment trends come and go, sometimes leaving an indelible mark on an industry, changing it for producer and consumer alike. Most of us may not know it, but the veterinary industry is rapidly transforming, especially in the Midwest, where many small-town and rural vets are near or past the age of 65. And it’s not as if today’s newly graduated veterinarians are financially able to afford owning and operating a clinic. Schooling isn’t cheap, and neither is the diagnostic equipment needed to run your average vet practice. But that didn’t stop Dr. Amber Andelt from making plans.

“Owning a clinic was something I dreamed of doing from a young age. My parents say I stated I was going to be a veterinarian when I was four years old. I followed my dream and never really thought I would be owning my clinic just four years out of vet school, but here I am, enjoying every day of it,” says Andelt. As the new part-owner and managing partner of Crete Veterinary Clinic, Andelt is learning firsthand the management and business skills needed to run a practice, two areas barely touched in most veterinary programs. However, unlike many of her counterparts, she was able to become an owner with help from an investment group and rollover equity from the selling veterinarian.


"I followed my dream and never really though I would be owning my clinic just four year out of vet school, but here I am, enjoying every day of it."
- Dr. Amber Andelt

Frank Zhang and Jake Sloane are, along with business partners Dan Markenson and Matt Sussman, the founding partners of ZBS Capital and Alliance Animal Health, a multi-site owner, operator and business partner to veterinarians countrywide. The Boston-based companies finance and take a majority-ownership stake in veterinary practices with the goal of providing long-term capital for clinics to grow under the umbrella of a sound network. They are partners in care, ensuring that doctors can fund new equipment purchases, better manage inventory, and assist in an eventual exit strategy on the part of the retiring owner. The company operates on the principle that a veterinarian knows his or her clinic best, and taking the burden of ownership out of running the practice not only aids in winding down to retirement, but also allows the doctor to do what they do best: treat the animals they love.

When it came time for Dr. Phil Hardenburger to consider retirement, this opportunity was the answer to a solution he’d been seeking for a while. Hardenburger opened Crete Veterinary Clinic in 1975, serving the town’s pets and nearby cattle herds, but when it came to looking for a doctor to continue his practice, he wanted to make sure the person he found was passionate about staying and working in Crete. “I didn’t want to close down and walk away,” says Hardenburger. “My goal was to sell the practice to someone wanting to prosper and be an asset to the community.”  Hardenburger had done some research on organizations that buy veterinary clinics, and for a moment he felt he had found one. Unfortunately, the deal fell through at the last minute.

Then Hardenburger met The Firm’s Broker Liaison, Rene Rademacher, at an industry convention where the prospect of selling was revisited and Hardenburger embarked down the road to becoming Zhang and Sloane’s next roll-up acquisition with the help of The Firm. Now, a roll-up by any other name, is a way of taking advantage of a fragmented market like that of the veterinary industry. Fragmentation refers to a diversified market, where essentially there are no Wal-Marts influencing the industry and driving down prices and squeezing out the competition. Animal clinics are generally small operations, with a multitude of them spread across any given area.  Services are in-person and unique to each transaction, meaning no two “products” are alike and mass-production is an impossibility. So, rolling up companies within the same industry is a way of rationalizing competition in a fragmented sector. It becomes a supportive network of like-minded businesses with the goal of growth, giving smaller operations greater resources and stability.


"I didn't want to close down and walk away. My goal was to sell the practice to someone wanting to prosper and be an asset to the community."
- Dr. Phil Hardenburger


Not only would Hardenburger now be able to retire, but a young Dr. Andelt would become an owner of her own vet much sooner than possible, and be the recipient of financial resources for state-of-the-art equipment. “ZBS Capital has been able to offer access to purchasing contracts with distributors and manufacturers on a great scale, offering more savings for the clinic as well as in other areas such as insurance, payroll and credit card processing,” says Andelt. The investors maintain a majority partnership in the practice while still giving Andelt sufficient controlling interest, allowing her the added support in decision making while “focusing on providing veterinary services and growing the practice.”  

The question that may come to some minds is why focus on the veterinary market for such large investments? Simply stated, the animal industry is ever-growing and lucratively priced, and as long as man’s best friend is furry, there won’t be a drop in demand any time soon. And the Midwest, with its healthy economy and sturdy practices, is a prime market for investment groups to provide capital and assist in growing businesses. But that doesn’t mean that robust vet practices won’t benefit from a partnership with an investor. Andelt is able to map out a five-year plan thanks to ZBS Capital. “We have set a goal to have not only one mobile vet truck, but two up and going within three years,” says Dr. Andelt, who also plans to have the large animal facilities remodeled and a “new boarding facility for dogs and cats within five years.”

For Andelt, Hardenburger and ZBS Capital, the long-term goal is not to create a standardized one-size-fits-all model, but to continue the growth of a healthy industry while still earning a steady return on investment. Relieving some of the more arduous business decisions from the mind of an owner-operator veterinarian can return their focus to the care of animals large and small. It’s a mutually beneficial relationship, and for Andelt, “owning the practice is rewarding. The more hard work and time you put into it, the more rewards you gain.”

The Firm Deal Review

Sale Price: $510,000

Location: Crete, Nebraska

Reason for Sale: Retirement

Investment Partner: ZBS Capital

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The Firm makes no warranties or representation in consideration to the information provided above. All communication regarding this business must occur directly with The Firm Advisors, LLC. The Firm is not a real estate brokerage and does not sell real estate. The Firm solely advises on exit strategy.