The Pet Cremation Roll-Up That Made No Sense

Episode notes

Episode 52 of The Buyout Show digs into one of the strangest private equity roll-ups of the past decade: the consolidation of pet cremation services. Lucas walks through why a wave of small, family-owned crematories were bought up between 2019 and 2023, what the acquirers assumed about pet owner behavior, and why the thesis is now unraveling. He cites specific numbers - how cremation rates for pets rose from 60% to over 85% in some metro areas, how a typical crematory does about 1,500 cremations a year at $300 each, and how roll-up firms levered those cash flows with debt that now looks too heavy as margins compress from rising natural gas prices and labor costs. Luna pushes back on whether this is just a bad macro moment or a genuinely flawed strategy. Lucas names one firm, Vetnos, that bought 22 crematories in 2021 alone and is now trying to sell them at a steep discount. The episode ends with a question about whether pet death services will be the next funeral home industry - or a cautionary tale for deal-hungry PE general partners.

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