Target Information

Gateway Services, a leading North American pet aftercare provider, has been a focal point of Imperial Capital's investment strategy. Since its initial partnership in 2015, Gateway has expanded significantly from just four locations in Ontario to over 125 locations across the United States and Canada. This growth is attributed to Gateway's commitment to exceptional customer service and continuous innovation in offerings, aligning well with the evolving needs of pet owners and veterinary professionals.

The pet aftercare industry is currently undergoing a transformation, driven by trends such as the humanization of pets. Gateway is poised to capitalize on these changes, with a vision aimed at leading innovation within the sector while addressing the demands of both pet parents and veterinarians.

Industry Overview in Canada

The pet care industry in Canada, which includes aftercare services, is experiencing robust growth. As pet ownership rises, the demand for aftercare services is increasing, driven by changing attitudes toward pets as family members rather than mere companions. This shift fosters a greater willingness among pet owners to invest in premium services and products that reflect their pets' needs.

In Canada, the pet aftercare sector has been evolving, with an emphasis on specialized services that enhance the overall well-being of pets. Companies in this space are adopting innovative practices like eco-friendly burial options and advanced cremation technologies, responding to a growing market for respectful and compassionate end-of-life services.

Furthermore, as veterinary care continues to advance, grooming aftercare services are becoming an integral part of pet wellness programs, thereby expanding the industry's scope. The Canadian market offers ample opportunities for growth, allowing companies like Gateway to strengthen their service offerings and cater to an expanding clientele.

Overall, the pet aftercare industry in Canada is positioned for further development, supported by favorable demographics and cultural shifts that prioritize the health and happiness of pets.

The Rationale Behind the Deal

The recent continuation fund transaction, through which Imperial Capital raised over $1 billion, demonstrates a strategic commitment to enhancing their partnership with Gateway Services. This move aims to provide liquidity to the existing investors of Imperial Capital Acquisition Fund V while allowing new investors, particularly ICG Strategic Equity, to join in this lucrative sector.

By extending their collaboration, Imperial Capital anticipates leveraging Gateway's proven expertise and substantial market presence to drive continued growth and innovation within the pet aftercare space. This transaction signifies confidence in the company's future trajectory and underlines the significance of adapting to evolving consumer needs.

Information About the Investor

Imperial Capital is a renowned mid-market private equity firm with $4.6 billion in assets under management. Based in Toronto, the firm specializes in identifying and investing in growth-oriented opportunities across healthcare, business services, and consumer services sectors. Imperial Capital is known for its active involvement in portfolio management and collaboration with experienced executives, which differentiates its approach to investing.

On the other hand, ICG Strategic Equity, a specialist investor in the GP-led secondaries market, plays a vital role in this deal. With over $12 billion committed to secondary transactions globally, ICGSE focuses on backing established financial sponsors, facilitating continued value creation while providing liquidity options for existing investors.

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The continuation fund transaction involving Gateway Services and Imperial Capital represents a robust investment opportunity, especially given the growing pet aftercare market. The impressive expansion of Gateway, alongside its commitment to innovation, positions it as a strong player within this rapidly evolving industry. Additionally, Imperial Capital's successful track record and active management approach further bolster confidence in the anticipated returns from this partnership.

Engaging with ICG Strategic Equity adds a layer of credibility to the deal, as their considerable experience in the GP-led secondaries market suggests strategic alignment and expertise in navigating complex transactions. The capital infusion will likely enhance Gateway's capacity to innovate and expand, capitalizing on industry trends focused on pet humanization.

Overall, this partnership signifies not only a continuation of a successful trajectory but also a strategic alignment that could yield substantial long-term rewards. Both companies exhibit a clear vision for future growth, making this transaction a potentially lucrative investment for all involved stakeholders.

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