Chewy to Acquire Modern Animal Accelerating Evolution to a Fully Integrated Healthcare Ecosystem
Chewy, Inc. (NYSE:CHWY) ("Chewy"), today announced it has entered into a definitive agreement to acquire Modern Animal, Inc. ("Modern Animal"), a technology-forward veterinary platform with 29 owned clinics, 24/7 virtual care, and a high-retention membership model. This acquisition represents an important strategic step in Chewy's evolution into a fully integrated pet healthcare ecosystem, combining care, commerce and services across the pet lifecycle. Modern Animal adds a scaled, tech-enabled in-person care model that accelerates Chewy's clinic expansion and complements its existing health, pharmacy and Chewy Vet Care ("CVC") capabilities.
The acquisition is expected to add over $125 million in annualized run rate revenue, instantly scaling Chewy Vet Care's footprint from 18 to 47 locations nationwide, and is expected to be EBITDA-dollar neutral in 2026 on a pro forma basis. Modern Animal clinics have historically matured over two to four years with a clear line of sight to EBITDA-dollar contribution beginning in 2027.
In addition to fast-scaling net sales, Modern Animal clinics demonstrate attractive unit economics, with over 2x above-industry-average revenue per location and EBITDA margins exceeding 20% for mature clinics. Supported by disciplined operations, clinical excellence and purpose-built technology, the returns align with Chewy's de novo clinic model.
"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."
Steven Eidelman, Founder and Chief Executive Officer of Modern Animal, added, "Since inception, our focus has been on prioritizing the human experience of both accessing and delivering care. Chewy shares that vision, and we are committed to building the future of veterinary care together, through medical excellence, expanded access and exceptional experiences for both pet parents and the veterinary teams that support them."
Beyond standalone value, Chewy estimates meaningful upside from integration into the broader Chewy ecosystem by applying Modern Animal's proprietary technology to help unlock industry-leading appointment case mix and premium ARPUs across Chewy's CVC network, and by increased engagement, cross-category purchasing, and retention of Modern Animal member families. These synergies are estimated to result in approximately 15–20% uplift in net sales per active customer (NSPAC) for the veterinary network.
"We're excited to welcome Modern Animal to Chewy as we advance our vision for the future of pet healthcare," said Mita Malhotra, President of Chewy Health. "The joining of Modern Animal's best-in-class operating systems and clinical expertise with Chewy's unparalleled customer acquisition and engagement engines creates an industry-leading, high ROI business almost immediately. Together, we can broaden access to convenient, high-quality veterinary care and deepen relationships with pet parents through a more connected healthcare experience."
Veterinary services represent an approximately $40 billion market in 2025, growing at roughly 5% annually, and Chewy is well positioned to win by combining its over 21 million active customers, Autoship subscription program, scaled Rx platform, and existing Chewy Vet Care network with Modern Animal's best-in-class in-person pet care to create the leading de novo veterinary clinic footprint in the U.S.
Key Strategic and Financial Highlights:
- Accelerates Vet Care Expansion: Adds immediate scale in a large, growing and high margin veterinary services market. From 18 to 47 locations nationwide; Modern Animal clinics expected to add over $125 Million in annualized run rate revenue.
- Accretive to Earnings (EPS): Expected to be accretive to earnings per share (EPS) within the first year following close, with increasing contribution starting year 2.
- Near-Term EBITDA Impact: Expected to be EBITDA dollar-neutral in FY2026 on a pro forma basis, with clear line of sight to EBITDA dollar contribution beginning in FY2027.
- Meaningful Synergies: Ecosystem benefits drive increasing synergies within the first 24 months through cross-platform engagement, operational efficiencies, and scale benefits.
- Enhanced Customer Flywheel: Expands Chewy's ability to acquire and engage high-value pet parents, driving incremental growth across its core commerce business through increased retention, cross-category purchasing, and prescription adoption.
- Integration Risk: Low. Established infrastructure and operating capabilities are expected to support efficient, low-cost integration with minimal disruption.
While the transaction is pending, Chewy's previously issued financial guidance remains unchanged, as the transaction is subject to customary closing conditions, including regulatory approval. The company will provide updated guidance consistent with its normal practice in the reporting period following the closing. Closing is expected to occur in Chewy's second quarter of fiscal year 2026.
Following the signing of this definitive agreement, Chewy's Board of Directors authorized an increase of $500 million to the company's existing share repurchase program. The authorization reflects continued confidence in the company's long-term strategy, strong free cash flow generation, and disciplined approach to capital allocation. Aside from the increased amount of authorized repurchases, there were no other changes to the terms of the program. Repurchases may be made from time to time at the company's discretion, with no obligation to purchase any specific number of shares. The program has no expiration date and may be modified, suspended or terminated at any time.
About Chewy
Our mission is to be the most trusted and convenient destination for pet parents and partners everywhere. We believe that we are the preeminent online source for pet products, supplies and prescriptions as a result of our broad selection of high-quality products and services, which we offer at competitive prices and deliver with an exceptional level of care and a personal touch to build brand loyalty and drive repeat purchasing. We seek to continually develop innovative ways for our customers to engage with us, as our websites and mobile applications allow our pet parents to manage their pets' health, wellness, and merchandise needs, while enabling them to conveniently shop for our products. We partner with approximately 4,000 of the best and most trusted brands in the pet industry, and we create and offer our own private brands. Through our websites and mobile applications, we offer our customers approximately 190,000 products services offerings, to bring what we believe is a high-bar, customer-centric experience to our customers.
About Modern Animal
Modern Animal is a veterinary company with a mission to bring humanity back to veterinary medicine on behalf of pets, their parents, and the veterinary community. Leveraging its own technology platform, 24/7 virtual care, and state-of-the-art clinics, Modern Animal offers members an all-in-one experience that connects every aspect of their pet's health, delivering personalized care and exceptional service at every touchpoint. For more information, visit www.modernanimal.com, and follow @modernanimal on Instagram and @modernanimalvet on TikTok.
Forward Looking Statements
This communication contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this communication, including statements regarding the expected timing and completion of the proposed acquisition, the anticipated effects of the proposed acquisition, our share repurchase program, our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "potential," "predict," "project," "seek," "should," "target," "will" or "would" or the negative of these words or other similar terms or expressions, although not all forward-looking statements contain these identifying words.
Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those in such forward-looking statements, including but not limited to, the ability to satisfy closing conditions to the proposed acquisition; the occurrence of any event that could give rise to termination of the definitive agreement to the proposed acquisition; the risk that the proposed acquisition may not be completed on the anticipated timeline or at all; the ability to successfully integrate the proposed acquisition into our existing business; the ability to realize anticipated benefits of the proposed acquisition on the anticipated timeline or at all; the effect of the announcement of the proposed acquisition on our ability or Modern Animal's ability to retain or hire necessary personnel and maintain relationships with material commercial counterparties and customers; our ability to achieve or exceed the financial outlook and guidance provided for future periods; our ability to estimate the size of relevant addressable markets; our ability to repurchase any of our outstanding shares of common stock under our share repurchase program; our ability to scale existing businesses or to expand into new jurisdictions and offerings; and our ability to successfully respond to business disruptions.
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