Rather than waiting for the regulatory risk to materialise, the company made a strategic move that not only avoided the threat but also generated capital to fund future expansion.
As the UK’s Competition and Markets Authority (CMA) intensifies scrutiny of veterinary pricing, CVS Group has acted to turn a looming threat into a strategic win. Last week, the company announced the sale of its crematoria division for £42.4 million to Anima Care Holding, representing a multiple of 10 times its FY2024 adjusted EBITDA — a clear signal that CVS chose to exit before value erosion set in.
The CMA’s recent working paper raised serious concerns about high mark-ups in pet cremation services, identifying them as a potential target for price caps or margin controls. With the regulator flagging emotionally sensitive moments as pricing pressure points, the risk of intervention in this space is high. That’s a problem for CVS, whose crematoria business, while small, has been extremely profitable.
Small but profitable niche
In FY2024, CVS’s crematoria services generated £12.0 million in revenue and £4.3 million in adjusted EBITDA, a margin of roughly 36% — the highest of any segment in the group. Although this unit accounted for just 1.7% of group revenue, it contributed significantly to overall profitability. As an example, while other divisions saw a sharp declined from 2023 to 2024, Online retail business -16.3% and Central Administration -19.3, Crematoria rose a significant 18.7%. Under normal conditions, such a high-margin niche might be ripe for expansion. But with regulatory clouds gathering, CVS appears to have seen the writing on the wall.
Rather than wait for the CMA to impose pricing restrictions that would compress margins, CVS opted to sell the division at a premium valuation. Interestingly, the announcement came a few days before the CMA published its proposed remedies. The £42.4m sale price equates to 10x adjusted EBITDA (in other words net profits!), a strong outcome for a business at risk of a regulatory squeeze.
For CVS, a price cap on cremations could meaningfully dent this segment’s earnings. If, for example, cremation prices had to be cut on the order of ~20% to meet a “reasonable” cap, crematoria revenue might fall by roughly £2–3 million on an annualised basis. With mostly fixed costs, much of that lost revenue would translate to lost profit. Even a 20% drop in cremation sales (≈£2.4m) could reduce EBITDA by £1m or more, out of £4.3 in 2024. In a more extreme scenario (the CMA finds margins “very high” and enforces a larger reset), profit in this segment could be cut roughly in half. While crematoria is a small piece of CVS’s £647m revenue base, the impact is disproportionate – potentially a ~0.5–1% hit to group EBITDA from cremation alone, if price caps substantially lower the fees CVS can charge.
Pivoting to duck a regulatory risk
Instead of absorbing that loss, CVS locked in a solid return and freed up capital to pursue its expansion strategy in Australia. The company has made five acquisitions in Australia in H1 2025 alone, and now operates 36 practices in a market with relatively low consolidation and no UK-style regulatory headwinds. Proceeds from the crematoria sale can now be recycled into this growth engine, where returns remain attractive and oversight is lighter.
For investors, this move reflects both clear-eyed risk management and disciplined capital allocation. For legal teams, this move shows how when you can’t avoid a regulatory risk, you can still pivot to turn in into an opportunity. CVS identified an emerging regulatory threat, extracted maximum value before conditions changed, and redirected capital into a safer, higher-growth geography.
The crematoria sale won’t fix all the regulatory risks CVS face, specially in the veterinary practice division were margins will be squeezed as a result of the proposed remedies, but it’s a textbook case of turning defensive strategy into a financial positive. For a full analysis of the CMA’s report on the company’s financials, don’t miss this article.
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