(RTTNews) - Chewy Inc. (CHWY) said on Wednesday that it has agreed to acquire Modern Animal Inc., as it looks to accelerate its push into a fully integrated pet healthcare ecosystem.
Modern Animal operates 29 clinics along with 24/7 virtual care and a membership-based model. The acquisition will expand Chewy's veterinary footprint from 18 to 47 locations across the U.S. and is expected to add over $125 million in annualized revenue.
The company said the deal is expected to be EBITDA-dollar neutral in 2026 on a pro forma basis, with contributions to begin in 2027. Mature clinics are generating EBITDA margins above 20% and more than double the industry-average revenue per location.
"Modern Animal perfectly complements our strategy to become the preeminent end-to-end pet health ecosystem, utilizing both owned and asset-light models," said Chewy CEO Sumit Singh. "We are acquiring a high-growth platform with positive 4-wall EBITDA at the clinic level, a best-in-class operating engine, and over 100,000 member families. This deal accelerates our Vet Care expansion, drives higher long-term customer value, and creates a clear competitive moat in the industry."
Chewy expects integration synergies to drive a 15% to 20% increase in net sales per active customer within its veterinary network through improved engagement and cross-category purchasing.
The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in Chewy's second quarter of fiscal 2026.
Further, the company's board authorized a $500 million increase to its existing share repurchase program.
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