For the first time in my 16 years advising pet industry business owners on mergers and acquisitions, I stood in front of my 2025 Global Pet Expo audience and said something I never expected to:
“Now may not be the ideal time to sell your pet company.”
That statement marked a major shift in a market that, for years, has been riding high. Through mid 2022, most companies enjoyed strong tailwinds—rising valuations, intense buyer demand, and relatively low interest rates. But over the past 6–24 months, things have changed. Fast.
What’s Changed in the Market?
Several overlapping factors are creating headwinds in today’s pet M&A landscape:
- Tariff uncertainty, especially for manufacturers with overseas production.
- High interest rates, which have raised the cost of capital for buyers.
- Broader economic uncertainty, slowing decision-making and compressing valuations.
- Maturing industry growth, with some categories hitting saturation.
While none of these are permanent, their combined impact has noticeably cooled buyer appetite and reduced deal values.
The Tariff Drag: A Real-World Case
Earlier this year, we were engaged to sell a company that, by all measures, was in an excellent position: double-digit growth, a strong brand, great margins, blue-chip customers, and a rich product innovation pipeline. But their entire product line was manufactured outside the U.S.
Despite the company’s strengths, buyers were hesitant—largely due to the unknowns surrounding tariffs. Ultimately, we advised the client to pause the sale for 6–12 months, anticipating that a clearer tariff picture will unlock stronger buyer engagement and a better valuation.
The Valuation Drop: 1–2 Turns Lower
Companies producing overseas are now commonly seeing EBITDA multiples that are 1–2 turns lower than what they could have fetched just a few years ago. For example, a durable goods brand that once commanded a 7–8x multiple may now receive offers in the 5–6x range.
Unless a business owner needs to sell, we’re strongly recommending a “wait-and-prepare” strategy: delay the process and focus on strengthening the business while waiting for more favorable conditions.
Where Demand Remains Strong
Despite the broader market slowdown, certain sectors are still attracting strong buyer interest—especially in pet wellness and supplements.
Buyers continue to focus on:
- Premium pet nutrition
- Health & wellness products
- Services that enhance pet longevity and quality of life
These categories benefit from the ongoing pet humanization trend, with Millennials and Gen Z pet owners willing to spend significantly on their pets’ health. Companies that can demonstrate efficacy—through science-backed outcomes or real-world results—are still commanding premium valuations.
The Rise of Exit Planning
One notable shift we’re seeing? A sharp uptick in demand for Exit Planning. More owners are recognizing the value of getting their business “exit-ready” well in advance of a sale. At BirdsEye, our Exit Planning services—led by Certified Exit Planning Advisor Erin Fenstermaker—are helping owners set a foundation for higher valuations and smoother closes.
Preparing for a sale isn’t just about timing the market. It’s about controlling the controllables: improving margins, securing customer contracts, tightening operations, and telling a clear, compelling growth story.
Looking Ahead
Yes, M&A momentum has slowed. But we believe that pause is temporary. Once tariffs are finalized and interest rates begin to ease, we expect deal activity—and valuations—to bounce back.
One thing remains unchanged: the pet industry’s long-term growth story. With global revenues projected to reach $428 billion by 2032, strategic and private equity buyers will continue to view this space as a fertile ground for investment.
Final Takeaway
If you’re considering a sale in the next 6–36 months, now is the time to plan—not to rush. The companies that take time to prepare will be the ones best positioned to capitalize when market conditions turn favorable again.
About the Author:
Carol Frank is passionate about business, animals, and the intersection of the two. After starting her career as a CPA, Carol founded and operated three pet companies– a retail pet store, a wholesale distribution company, and a pet product manufacturing company. She then leveraged her experience in both finance and entrepreneurship to start BirdsEye Advisory Group, an M&A Advisory firm that helps pet company founders and entrepreneurs when they are ready to sell their business. She has a BBA in accounting from The University of Texas at Austin and an MBA from Southern Methodist University.
Over the years, Carol has served in leadership roles within the pet industry and on the board of more than a dozen nonprofit and business organizations. Her biggest passion is animals and she is thrilled to share her life with her Eclectus parrot Peri, and Daphne, a sweet, energetic Whoodle. She loves skiing, biking, and birding.