The industry thesis in animal health is highly compelling: more animals per household, more dollars per pet and the humanization of animals are driving strong and sustainable growth across the sector. Further, veterinary care for pets has expanded to include most specialties utilized in human health and this enhanced care model is enabling pets to live longer. With the expansion of specialties and increased life expectancy, demand for medications and, in particular, specialty pharmacy medication, is rapidly growing. Wedgewood, a compounding pharmacy serving the specific and diverse needs of the veterinary market, was and is well positioned to capitalize on these trends.
New Harbor was fortunate to partner with Lucy Malmberg in our investment in Wedgewood. Lucy and her late husband, George, purchased Wedgewood as a small retail pharmacy in 1981 and over 35 years transformed the business into an industry leader in veterinary compounding, both in size and quality. At the time of New Harbor’s investment, the 265-employee Wedgewood team was serving approximately 40,000 veterinarian customers from a single 40,000 square foot facility in Swedesboro, New Jersey. As part of our investment, founder Lucy Malmberg transitioned to Executive Chair of the Board and Marcy Bliss, long-time employee and strategic business leader, was appointed CEO.
“New Harbor’s healthcare industry expertise and strong cultural fit were key differentiators for us. Their track record for successfully executing growth strategies, as well as their experience with medical products distribution will elevate our business to the next level, while upholding the high quality, innovation and reliable service our customers expect.”Marcy Bliss
Wedgewood Pharmacy, President and CEO
Our investment management plan focused on extending the company’s leadership position and capturing additional share. Key initiatives included an organizational build out (e.g. COO, general counsel, strategic board of directors), facility capacity expansion and optimization, refined sales and marketing strategy, technology enhancements to improve customer ease of doing business, and expanded preparation offering through continued innovation. Numerous organic revenue growth and operational efficiency improvement initiatives combined to create significant runway for growth.
To further capitalize on market opportunities, Wedgewood acquired one of its largest competitors, broadening product and geographic capabilities and we believe positioned the company as a partner of choice for corporate groups within the quickly consolidating veterinary services market. Subsequent acquisitions have contributed additional product and operational capabilities, including an FDA-registered 503B outsourcing facility. The now almost 700-employee Wedgewood team serves over 50,000 veterinarian customers from ~160,000 square feet across three facilities in New Jersey, Arizona and California, with earnings approximately four times the level at our time of investment.
While the market and business have evolved, the core tenets of the investment management plan – partnering with management to continuously extend the company’s leadership position and market share through customer service, quality and innovation – remain as relevant today as they were in 2016 at the time of our investment.