JAB’s National Veterinary Associates is splitting into two separately-managed pet hospital businesses, the company said in a statement.

NVA will separate out its Ethos Veterinary Health business, which operates 145 specialty vet hospitals, the statement said, which confirmed a Bloomberg News report. That will leave NVA with about 1,400 locations consisting mostly of general practice vet hospitals.

Both Ethos and NVA will each prepare for initial public offerings in the next two to three years.

NVA’s longtime chief executive officer, Greg Hartmann, will become chairman of a combined company that oversees both Ethos and NVA. Both businesses will report to incoming CEO Larry Allgaier.

Hartmann said he was “extremely pleased to have Larry take the helm as CEO,” and he’ll remain a significant long-term shareholder. 

Ethos has run-rate revenues of about $2 billion, while NVA makes about $4 billion in revenue.

The global pet economy is projected to reach almost half a trillion dollars — some $493 billion — by 2030, up 54 percent from today, according to Bloomberg Intelligence. Pets these days are treated more like family members, meaning owners are open to shelling out for pricier health treatments.

JAB, which owns stakes in businesses like Keurig Dr Pepper Inc. and Krispy Kreme Inc., has been been making a big push into pet care in recent years. It bought NVA in 2019 from private equity firm Ares Management Corp. 

JAB senior partner David Bell said the NVA has tripled in size since the acquisition and the portfolio is now the leader in specialty animal care.

“Now is the time for us, as long-term strategic shareholders, to focus on the next several years of value creation by creating two distinct, leading veterinary businesses, as we prepare for an eventual IPO of each of them,” Bell said. 

NVA went on to acquire Ethos in 2022 for about $1.65 billion. The U.S. Federal Trade Commission scrutinized the acquisition and ordered divestitures of some clinics last year. The commission has also imposed strong prior approval and notice requirements on JAB for future acquisitions of specialty and emergency vet clinics within 25 miles of any existing facilities.