Pet M&A Volume Fell 13%. Valuations Rose. That's the Signal.

Pet M&A volume fell 13.3% year over year in Q1 2026, from $226 billion to $196 billion, according to Cascadia Capital's latest report.

The consensus reading: the market is cooling, buyers are pulling back, and now is not the time to think about an exit or a partnership.

What the consensus misses: deal count fell faster than dollar volume, and that spread is the whole story

Deal count dropped 19.2%, from 4,211 transactions to 3,402. That means the average deal got bigger, and buyers paid more per transaction. EV/EBITDA multiples climbed from 11.4x in 2025 to 12.1x in 2026, pre-pandemic norms, Cascadia says, after three years of compression.

Fewer deals at higher prices is not a cooling market. It is a selective market, and selective markets favor operators with clean financials, differentiated assortments, and a story that survives due diligence. The buyer pool shrank, but the buyers who stayed are paying more for the right asset.

Cascadia's Aarti Kapoor and Bryan Jaffe put it plainly: 2026 multiples "are expected to revert to longer-term averages after valuation multiple compression in 2023-2025." That reversion is driving renewed interest among owners considering exits, "particularly for assets that have been aging in sponsor portfolios for 5+ years."

If you run a store or a brand and you have been waiting for valuations to recover before you talk to a buyer, the data says the recovery already happened.

The category math: where the premium multiples actually sit

Cascadia tracked over 175 pet industry transactions since January 2010 with disclosed or estimated values. Animal health commands the highest EBITDA multiples at 19.2x, followed by veterinary at 17.3x, retail at 13.6x, consumables at 12.5x, and products at 8.8x.

Retail sits in the middle of that range, above consumables and products but below the clinical categories. A well-run independent with strong unit economics and a defensible customer base is worth more to a buyer today than it was two years ago, but only if the financials prove it.

The products category, the lowest multiple on the list, tells you what commodity assortments are worth. If your store's value proposition is "we stock the same brands as everyone else," you are competing in the 8.8x tier. If your value is a curated assortment, a loyal customer file, and margin discipline, you are competing in the 13.6x tier.

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Who benefits from the consensus being believed

Buyers benefit when sellers believe the market is soft. A seller who thinks valuations are still compressed will accept a lower multiple or wait another year, giving the buyer time to shop and negotiate from a position of perceived strength.

Private equity sponsors holding aging portfolio companies benefit when other sellers stay on the sidelines. Cascadia specifically calls out assets that have been in sponsor portfolios for five-plus years as newly attractive exit candidates. Those sponsors want to sell into a market where supply is constrained and buyers are competing, not into a crowded field of comparable assets.

The buyer who tells you "the market's tough right now, let's revisit this next year" is not doing you a favor. They are managing your expectations so you anchor low.

The risk in our own take

We could be wrong if the second half of 2026 sees a wave of new deals that drives multiples back down. Cascadia and R.L. Hulett both note that operators now have "greater visibility" after navigating consumer price sensitivity, tariff exposure, and P&L pressures that made valuation conversations difficult in prior quarters. If that visibility was masking weakness rather than revealing strength, the current multiples may not hold.

We could also be wrong if the "right asset" threshold is higher than we think. Buyers paying 12.1x are hunting for proven performers with growth upside, not turnaround projects. If your store's financials are messy, your customer file is stale, or your assortment is undifferentiated, the rising multiple may not apply to you.

But the source data supports the contrarian read: fewer deals, higher prices, and a reversion to pre-pandemic norms after three years of compression. That is a seller's market for quality assets, not a buyer's market for distressed ones.

What changes Monday

If you have been thinking about an exit or a partnership, get your financials audit-ready now. Buyers are selective, which means due diligence is thorough. Clean books, clear unit economics, and a differentiated customer story are table stakes.

If you are watching consolidation among your suppliers, distributors, brands, manufacturers, track which ones are absorbing competitors. Fewer deals means the survivors gain pricing power and shelf leverage. A brand that just bought two competitors is not negotiating terms the same way it did six months ago.

If you are a brand operator fundraising or courting strategic buyers, this is the cycle to position for premium terms. The data says acquirers are paying more for the right deal, but "right" means proven performance and growth upside, not potential.

The headline number, M&A volume down 13%, reads like a cooling market. The actual number, valuations up from 11.4x to 12.1x, says buyers are hunting and paying more for what they want. If you are what they want, the window is open.

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